Editing IPCC:AR6/WGIII/Chapter-11 (section)

== 11.4 Sector Mitigation Pathways and Cross-sector Implications ==

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This section continues the discussion of the various mitigation options and strategy elements introduced in Section and makes them explicit for the most relevant industry sectors. For the various sectors, Section [[#_idTextAnchor011|11.4.1]] concludes with a tabular overview of key technologies and processes, their technology readiness level (TRL), potential timing of market penetration, mitigation potential and assessment of associated mitigation costs.

An integrated sequencing of mature short-term actions and less mature longer-term actions is crucial to avoid lock-in effects. Temporal implementation and discussion of the general quantitative role of the different options to achieve net zero emissions in the industrial sectors is core to the second part of the section ( [[#11.4.2|Section 11.4.2]] ), where industry-wide mitigation pathways are analysed. This comprises the collection and discussion of mitigation scenarios available in the literature with a high technological resolution for the industry sector in addition to a set of illustrative global and national GHG mitigation scenarios selected from chapters 3 and 4, representing different GHG mitigation ambitions and different pathways to achieve certain mitigation targets. Comparing technology-focused sector-based scenarios with more top-down-oriented scenario approaches allows for a reciprocal assessment of both perspectives and helps to identify robust elements for the transformation of the sector. Comparison of real-world conditions within the sector (e.g., industry structure and logics, investment cycles, market behaviour, power, and institutional capacity) and the transformative pathways described in the scenarios helps researchers, analysts, governments, and all stakeholders understand the need not only for technological change, but for structural (e.g., new value chains, markets, infrastructures, and sectoral couplings) and behavioural (e.g., design practices and business models) change at multiple levels.

When undergoing a transformative process, it is obvious that interactions occur within the sector but also on a cross-sectoral basis. Relevant interactions are identified and discussed in the third and fourth part of the subsection. Changes are induced along the whole value chain, i.e., switching to an alternative (climate-friendly, e.g., low-GHG hydrogen-based) steel-making process has substantial impacts on the value chain, associated sub-suppliers, and electricity and coal outputs. In addition, cross-sectoral interactions are discussed. This includes feedback loops with other end-use chapters, for example, higher material demand through market penetration of some GHG mitigation technologies or measures (e.g., insulation materials for buildings, steel for windmills) and lower demand through others (e.g., less steel for fossil fuel extraction, transport and processing), or substantial additional demand of critical materials (e.g., the widely varying demands for copper, lithium, nickel, cobalt and rare earths for producing windmills, solar panels, and batteries). Generally, if consumption- (or behaviour-) driven additional material demand creates scarcity it becomes important to increase efforts on material efficiency, substitution, recycling/reuse, and sustainable consumption patterns.

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=== 11.4.1 Sector-specific Mitigation Potential and Costs ===

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Based on the general discussion of strategies across industry in [[#11.3|Section 11.3]] , this subsection focuses on the sector perspective and provides insights into the sector-specific mitigation technologies and potentials. As industry is comprised of many different subsectors, the discussion here has its focus on the most important sources of GHG emissions, that is, steel, cement and concrete, as well as chemicals, before other sectors are discussed.

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==== 11.4.1.1 Steel ====

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For the period leading up to 2020, in terms of end-use allocation globally, approximately 40% of steel is used for structures, 20% for industrial equipment, 18% for consumer products, 13% for infrastructure, and 10% for vehicles ( [[#Bataille--2020b|Bataille 2020b]] ). The global production of crude steel increased by 41% between 2008 and 2020 ( [[#World%20Steel%20Association--2021|World Steel Association 2021]] ) and its GHG emissions, depending on the scope covered, is 3.7–4.1 GtCO 2 -eq. It represented 20% of total global direct industrial emissions in 2019 accounting for coke oven and blast furnace gases use ( [[#Crippa--2021|Crippa et al. 2021]] ; [[#Lamb--2021|Lamb et al. 2021]] ; [[#Minx--2021|Minx et al. 2021]] ; Olivier and Peters 2018; [[#World%20Steel%20Association--2021|World Steel Association 2021]] ; [[#IEA--2020a|IEA 2020a]] ) (Figure 11.4 and [[#_idTextAnchor023|Table 11.1]] ). Steel production can be divided into primary production based on iron ore and secondary production based on steel scrap. The blast furnace-basic oxygen furnace route (BF-BOF) is the main primary steel route globally, while the electric arc furnace (EAF) is the preferred process for the less energy and emissions-intensive melting and alloying of recycled steel scrap. The direct reduced iron (DRI) route is a lesser-used route that replaces BFs for reducing iron ore, usually followed by an EAF. In 2019, 73% of global crude steel production was produced in BF-BOFs, while 26% was produced in EAFs, a nominal 5.6% of which is DRI ( [[#World%20Steel%20Association--2021|World Steel Association 2021]] ).

An estimated 15% energy efficiency improvement is possible within the BF-BOF process (Figure 11.8). Several options exist for deep-GHG emissions reductions in steel-production processes ( [[#Fischedick--2014|Fischedick et al. 2014]] b; [[#Leeson--2017|Leeson et al. 2017]] ; [[#Axelson--2018|Axelson et al. 2018]] ; [[#Vogl--2018|Vogl et al. 2018]] ; [[#Bataille--2020a|Bataille 2020a]] ; [[#Holappa--2020|Holappa 2020]] ; [[#Rissman--2020|Rissman et al. 2020]] ; [[#Fan--2021|Fan and Friedmann 2021]] ; [[#Wang--2021|Wang et al. 2021]] ).Each could reduce specific CO 2 emissions of primary steel production by 80% or more relative to today’s dominant BF-BOF route if input streams are based on carbon-free energy and feedstock sources or if they deploy high-capture CCS:

• '''Increasing the share of the secondary route''' can bring down emissions quickly and potential emissions savings are significant, from a global average 2.3 tCO 2 –1 per tonne steel in BF-BOFs down to 0.3 (or less) tCO 2 –1 per tonne steel in EAFs ( [[#Pauliuk--2013a|Pauliuk et al. 2013a]] ; [[#Zhou--2019|Zhou et al. 2019]] ), the latter depending on scrap preheating and electricity GHG intensity. However, realising this potential is dependent on the availability of regional and global scrap supplies and requires careful sorting and scrap management, especially to eliminate copper contamination ( [[#Daehn--2017|Daehn et al. 2017]] ). There is significant uncertainty about how much new scrap will be available and usable ( [[#Xylia--2018|Xylia et al. 2018]] ; [[#IEA--2019b|IEA 2019b]] ; [[#Wang--2021|Wang et al. 2021]] ). Most steel is recycled already; the gains are mainly to be made in quality (i.e., separation from contaminants like copper). End-of-life scrap availability and its contribution to steel production will increase as in use stock saturates in many countries ( [[#Xylia--2016|Xylia et al. 2016]] ).

'''•''' '''BF-BOFs with CCU or CCS.''' [[#Abdul%20Quader--2016|Abdul Quader et al. (2016)]] and [[#Fan--2021|Fan and Friedmann (2021)]] indicate that it would be difficult to retrofit BF-BOFs beyond 50% capture, which is insufficient for long-term emission targets but may be useful in some cases for avoiding cumulative emissions where other options are not available. However, BF-BOFs need their furnaces relined every 15–25 years ( [[#IEA--2021a|IEA 2021a]] ; [[#Vogl--2021b|Vogl et al. 2021b]] ), at a cost of 80–100% of a new build, and this would be an opportunity to build a new facility designed for 90%+ capture (e.g., fewer CO 2 outlets). This would depend upon access to transport to geology appropriate for CCS.

'''•''' '''Methane-based syngas (hydrogen and carbon monoxide) direct reduced iron (DRI) with CCS''' . Most DRI facilities currently use a methane-based syngas of H 2 and CO as both reductant and fuel (some use coal). A syngas DRI-EAF steel-making facility has been operating in Abu Dhabi since 2016 that captures carbon emitted from the DRI furnace (where it is a co-reductant with hydrogen) and sends it to a nearby oil field for enhanced oil recovery.

'''•''' '''Hydrogen-based direct reduced iron (H-DRI)''' is based on the already commercialised DRI technology but using only hydrogen as the reductant; pure hydrogen has already been used commercially by Circored in Trinidad 1999–2008. The reduction process of iron ore is typically followed by an EAF for smelting. During a transitional period, DRI could start with methane or a mixture of methane and hydrogen as some of the methane (≤30% hydrogen can be substituted with green or blue hydrogen without the need to change the process). If the hydrogen is produced based on carbon-free sources, this steel-production process can be nearly CO 2 neutral ( [[#Vogl--2018|Vogl et al. 2018]] ).

'''•''' '''In the aqueous electrolysis route''' (small-scale piloted as Siderwin during the EU ULCOS programme), the iron ore is bathed in an electrolyte solution and an electric current is used to remove the oxygen, followed by an electric arc furnace for melting and alloying.

'''•''' In the ''molten'' '''oxide electrolysis''' route, an electric current is used to directly reduce and melt the iron ore using electrolysis in one step, followed by alloying. These processes both promise a significant increase in energy efficiency compared with the direct reduced iron (DRI) and blast furnace routes ( [[#Cavaliere--2019|Cavaliere 2019]] ). If the electricity used is based on carbon-free sources, this steel-production process can be nearly CO 2 neutral. Both processes would require supplemental carbon, but this is typically only up to 0.05% per tonne steel, with a maximum of 2.1%. Aqueous electrolysis is possible with today’s electrode technologies, while molten oxide electrolysis would require advances in high-temperature electrodes.

'''•''' '''The''' '''HIsarna® process''' is a new type of coal-based smelting reduction process, which allows certain agglomeration stages (coking plant, sintering/pelletising) to be dispensed with. The iron ore, with a certain amount of steel scrap, is directly reduced to pig iron in a single reactor. This process is suitable to be combined with CCS technology because of its relatively easy to capture and pure CO 2 exhaust gas flow. CO 2 emission reductions of 80% are believed to be realisable relative to the conventional blast furnace route ( [[#Abdul%20Quader--2016|Abdul Quader et al. 2016]] ). The total GHG balance also depends on further processing in a basic oxygen furnace or in an EAF. The HIsarna process was small-scale piloted under the EU ULCOS program.

• '''Hydrogen co-firing''' '''in BF-BOFs''' can potentially reduce emission by 30–40%, referring to experimental work by the Course50 projects and Thyssen Krupp, but coke is required to maintain stack integrity beyond that.

Reflecting the different conditions at existing and potential future plant sites, when choosing one of the above options a combination of different measures and structural changes (including electricity, hydrogen and CCU or CCS infrastructure needs) will likely be necessary in the future to achieve deep reductions in CO 2 emissions of steel production.

In addition, increases in material efficiency (e.g., more targeted steel use per vehicle, building or piece of infrastructure) and increases in the intensity of product use (e.g., sharing cars instead of owning them) can contribute significantly to reduce emissions by reducing the need for steel production. The [[#IEA--2019b|IEA (2019b)]] suggested that up to 24% of cement and 40% of steel demand could be plausibly reduced through strong material efficiency efforts by 2060. Potential material efficiency contribution for the EU is estimated to be much higher – 48% ( [[#Material%20Economics--2019|Material Economics 2019]] ). Recycling would cut the average CO 2 emissions per tonne of steel produced by 60% ( [[#Material%20Economics--2019|Material Economics 2019]] ), but globally by 2050 secondary steel production is limited to 40–56% in various scenarios ( [[#IEA--2019b|IEA 2019b]] ), with 46% in the [[#IEA--2021a|IEA (2021a)]] and up to 56% in 2050 in [[#Xylia--2016|Xylia et al. (2016)]] . It may scale up to 68% by 2070 ( [[#Xylia--2016|Xylia et al. 2016]] ). CCU and more directly CCS are other options to reduce GHG emissions but depend on the full lifecycle net GHGs that can be allocated to the process ( [[#11.3.6|Section 11.3.6]] ). Bio-based fuels can also substitute for some of the coal input, but due to other demands for biomass this strategy is likely to be limited to specific cases.

Abatement costs for these strategies vary considerably from case to case and for each a plausible cost range is difficult to establish; compare this with '''Table 11.3''' ( [[#Fischedick--2014|Fischedick et al. 2014]] b; [[#Leeson--2017|Leeson et al. 2017]] ; [[#Axelson--2018|Axelson et al. 2018]] ; [[#Vogl--2018|Vogl et al. 2018]] ; [[#Fan--2021|Fan and Friedmann 2021]] ; [[#Wang--2021|Wang et al. 2021]] ). A key point is that while cost of production increases are significant, the effect on final end uses is typically very small ( [[#Rootzén--2016|Rootzén and Johnsson 2016]] ), with significant policy consequences (see [[#11.6|Section 11.6]] on public and private lead markets for cleaner materials).

'''Table 11.3 | Technological potentials and costs for deep decarbonisation of basic industries.''' Percentages of maximum reduction are multiplicative, not additive.

{| class="wikitable"
|-
! Sector

! Current intensity (tCO 2 -eq t –1 )

! Potential GHG reduction

! NASA TRL

! Cost per tonne CO 2 -eq

(USD2019 tCO 2 -eq –1 for percentage of emissions)

? = unknown

! Year available, assuming policy drivers

|-
| colspan="6"| '''Iron and steel'''

|-
| Current intensity – all steel (worldsteel)

| 1.83

|
|-
| Current intensity – ~BF-BOF/Best BF-BOF and NG-DRI (with near-zero GHG electricity)

| 2.3/1.8 and 0.7

|
|-
| Current intensity – EAF (depends on electricity intensity &amp; pre-heating fuel)

| ≥0

| Up to 99%

|
|-
| Material efficiency (IEA 2019 ‘Material Efficiency…’)

|
| Up to 40%

| 9

| Subject to supply chain building codes and education

| Today

|-
| More recycling; depends on available stock, recycling network, quality of scrap, availability of DRI for dilution

|
| Highly regional, growing with time

| 9

| Subject to logistical, transport, sorting and recycling equipment costs

| Today

|-
| BF-BOF with top gas recirculation and CCU/S a

|
| 60%

| 6–7

| USD70–130 t –1

| 2025–2030

|-
| Syngas (H 2 &amp; CO) DRI EAF with concentrated flow CCU/S

|
| ≥ 90%

| 9

| ≥USD40 t –1

| Today

|-
| Hisarna with concentrated CO 2 capture b

|
| 80–90%

| 7

| USD40–70 t –1

| 2025

|-
| Hydrogen DRI EAF c – fossil hydrogen with CCS is in operation, electrolysis-based hydrogen scheduled for 2026

|
| Up to 99%

| 7

| USD39–79 t –1 and USD46 MWh –1 d

| 2025

|-
| Aqueous (e.g., SIDERWIN) or Molten Oxide (e.g., Boston Metals) Electrolysis (MOE) e

|
| Up to 99%

| 3–5

| ?

| 2035–2040

|-
| colspan="6"| '''Cement and concrete'''

|-
| Current intensity, about 60% is limestone calcination

| 0.55

|
|-
| Building design to minimise concrete ( [[#IEA--2019b|IEA 2019b]] , 2020a)

|
| Up to 24%

| 9

| Low, education, design and logistics related

| 2025

|-
| Alternative lower-GHG fuels, e.g., waste (biofuels and hydrogen, see above)

|
| 40%

| 9

| Cost of alt. fuels

| Today

|-
| CCUS for process heating &amp; CaCO 3 calcination CO 2 (e.g., LEILAC, possible retrofit) f

|
| 99% calc., ≤90% heat

| 5–7

| ≤USD40t –1 calc. ≤USD120t –1 heat

| 2025

|-
| Clinker substitution (e.g., limestone + calcined clays) g

|
| 40–50%

| 9

| Near zero, education, logistics, building code revisions

| Today

|-
| Use of multi-sized and well-dispersed aggregates d

|
| Up to 75%

| 9

| Near zero

| Today

|-
| Magnesium or ultramafic cements d

|
| Negative?

| 1–4

| ?

| 2040

|-
| colspan="6"| '''Aluminium and other non-ferrous metals'''

|-
| Current Al intensity, from hydro- to coal-based electricity production. 1.5 tCO 2 are produced by graphite electrode decay

| 1.5 t –1 + electricity required (i.e., 10 t –1 (NG) to 18 t –1 (coal))

|
|-
| Inert electrodes and green electricity h

|
| 100%

| 6–7

| Relatively low

| 2024

|-
| Hydro/electrolytic smelting (with CO 2 CCUS if necessary)

|
| Up to 99%

| 3–9

| Ore-specific

| &lt;2030

|-
| colspan="6"| '''Chemicals (see also cross-cutting feedstocks above)i'''

|-
| Catalysis of ammonia from low-/zero-GHG hydrogen H 2

| 1.6 (NG), 2.5 (naptha), 3.8 (coal)

| ≤99%

| 9

| Cost of H 2

| Today

|-
| Electrocatalysis: CH 4 , CH 3 OH, C 2 H 5 OH, CO, olefins j

|
| Up to 99%

| 3

| Cost: elec., H 2 , CO x

| 2030

|-
| Catalysis of olefins from: (m)ethanol, H 2 and CO x directly

|
| 9%

| 9, 3

| Cost: H 2 and CO x

| &lt;2030

|-
| End-use plastics, mainly CCUS and recycling

| 1.3–4.2, about 2.4

| 94%

| 5–6

| USD150–240 t –1

| 2030?

|-
| colspan="6"| '''Pulp and paper'''

|-
| Full biomass firing, including lime kilns

|
| 60–75%

| 9

| About USD50 t –1

| Today

|-
| colspan="6"| '''Other manufacturing'''

|-
| Electrification using current tech (boilers, 90 °C –140 ° C heat pumps

|
| 99%

| 9

| Cost: elec. vs NG

| 2025

|-
| Using new tech (induction, plasma heating)

|
| 99%

| 3–6

|
| 2025

|-
| colspan="6"| '''Cross-cutting (CCUS, H''' ''2'' ''', net zero C''' ''o'' '''O''' ''x'' '''H''' ''y'' '''fu''' '''els/feedstocks)'''

|-
| CCUS of post-combustion CO 2 diluted in nitrogen e

|
| Up to 90%

| 6–7

| ≤USD120 t –1

| 2025

|-
| CCUS of concentrated CO 2 e

|
| 99%

| 9

| ≤USD40 t –1

| Today

|-
| H 2 production: steam or auto-thermal CH 4 reforming with CCS e

|
| SMR ≤90% ATR &gt;90%

| 6*, 9**

| 56% @≤USD40 t –1 chem**, ≤USD120 heat*,+20%/kg

| ≤2025

|-
| H 2 production: coal with CCUS e

|
| ≤90%

| 6

| 25–50% per H 2 kg –1

| ≤2025

|-
| H 2 production: alkaline or PEM electrolysis k

|
| 99%

| 9

| About USD50 t –1 or &lt;USD20–30 MWh –1

| Today

|-
| H 2 production: reversible solid oxide fuel electrolysis j

|
| 99%

| 6–8

| About 40USD t –1 or &lt;USD40 MWh –1

| 2025

|-
| H 2 production: CH 4 pyrolysis or catalytic cracking l

|
| 99%

| 5

| ?

| 2030?

|-
| Hydrogen as CH 4 replacement

|
| ≤10%

| 9

| See above

| Today

|-
| Biogas or liquid replacement hydrocarbons

|
| 60–90%

| 9

| Biomass USD per GJ –1 ; ≥USD50 t –1 , uncertain

| Today

|-
| Anaerobic digestion/fermentation: CH 4 , CH 3 OH and C 2 H 5 OH m

|
| Up to –99%

| 9

| Biomass cost

| Today

|-
| Methane or methanol from H 2 and CO x (CCUS for excess). Maximum –50% reduction if C source is FF

|
| 50–99%

| 6–9

| Cost: H 2 and CO x

| Today

|-
| 850°C woody biomass gasification with CCS for excess carbon: CO, CO 2 , H 2 , H 2 O, CH 4 , C 2 H 4 and C 6 H 6 n

|
| Could be negative

| 7–8

| About USD50–75 t –1 , uncertain

| Today

|-
| Direct air capture for short- and long-chain C o O x H y o

|
| Up to 99%

| 3

| Cost: E, H 2, CO x about USD94–232 t –1

| ≤2030

|}

a Data for CCS costs for steel-making: [[#Birat--2012|Birat (2012)]] ; [[#Leeson--2017|Leeson et al. (2017)]] ; and [[#Axelson--2018|Axelson et al. (2018)]] .

b Data for Hisarna: [[#Axelson--2018|Axelson et al. (2018)]] .

c Data for hydrogen DRI electric arc furnaces: [[#Fischedick--2014b|Fischedick et al. (2014b)]] and [[#Vogl--2018|Vogl et al. (2018)]] .

d Converted from EUR2018 34–68 t –1 and EUR2018 40 MWh –1 .

e Data for Molten Oxide Electrolysis (also known as SIDERWIN): [[#Fischedick--2014|Fischedick et al. 2014]] b and [[#Axelson--2018|Axelson et al. 2018]] . The TRLs differ by source, the value provided is from [[#Axelson--2018|Axelson et al. (2018)]] , based on UCLOS SIDERWIN.

f Data for making hydrogen from SMR and ATR with CCUS: [[#Leeson--2017|Leeson et al. (2017)]] ; [[#Moore--2017|Moore (2017)]] ; and [[#IEA--2019f|IEA (2019f)]] . The cost of CCS disposal of concentrated sources of CO 2 at USD15–40 tCO 2 -eq –1 is well established as commercial for direct or EOR purposes and is based on the long-standing practice of disposing of hydrogen sulphide and oil brines underground: [[#Wilson--2003|Wilson et al. (2003)]] and [[#Leeson--2017|Leeson et al. (2017)]] . There is a wide variance, however, in estimated tCO 2 -eq –1 break-even prices for industrial post-combustion capture of CO 2 from sources highly diluted in nitrogen (e.g., [[#Leeson--2017|Leeson et al. (2017)]] at USD60–170 tCO 2 -eq –1 ), but most fall under USD120 tCO 2 -eq –1 .

g Data for clinker substitution and use of well-mixed and multi-sized aggregates: [[#Fechner--2012|Fechner and Kray 2012]] ; [[#Lehne--2018|Lehne and Preston 2018]] ; and [[#Habert--2020|Habert et al. 2020]] ).

h Rio Tinto, Alcoa and Apple have partnered with the governments of Québec and Canada to form a coalition to commercialise inert as opposed to sacrificial graphite electrodes by 2024, thereby making the standard Hall-Héroult process very low emissions if low-carbon electricity is used.

i Data and other information: [[#Bazzanella--2017|Bazzanella and Ausfelder (2017)]] ; [[#Axelson--2018|Axelson et al. (2018)]] ; [[#IEA--2018a|IEA (2018a)]] ; [[#De%20Luna--2019|De Luna et al. (2019)]] ; and Philibert (2017b,a).

j See [[#De%20Luna--2019|De Luna et al. (2019)]] for a state-of-the-art review of electrocatalysis, or direct recombination of organic molecules using electricity and catalysts.

k Data for hydrogen production from electrolysis: [[#Bazzanella--2017|Bazzanella and Ausfelder (2017)]] ; [[#Philibert--2017a|Philibert (2017a)]] ; [[#Philibert--2017b|Philibert (2017b)]] ; [[#IEA--2019f|IEA (2019f)]] ; and [[#Armijo--2020|Armijo and Philibert (2020)]] .

l Data for methane pyrolysis to make hydrogen: Abbas and Wan Daud (2010). Data for hydrogen production from methane catalytic cracking: [[#Amin--2011|Amin et al. (2011)]] and [[#Ashik--2015|Ashik et al. (2015)]] .

m Data for anaerobic digestion or fermentation for the production of methane, methanol and ethanol: [[#De%20Luna--2019|De Luna et al. (2019)]] .

n Data for woody biomass gasification: [[#Li--2019|Li et al. (2019)]] and [[#van%20der%20Meijden--2011|van der Meijden et al. (2011)]] .

o Data on direct air capture of CO 2 : [[#Keith--2018|Keith et al. (2018)]] and [[#Fasihi--2019|Fasihi et al. (2019)]] .

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==== 11.4.1.2 Cement and Concrete ====

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The cement sector is regarded as a sector where mitigation options are especially narrow ( [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission 2018]] ; [[#Habert--2020|Habert et al. 2020]] ). Cement is used as the glue to hold together sand, gravel and stone aggregates to make concrete, the most consumed manufactured substance globally. The production of cement has been increasing faster than the global population since the middle of the last century ( [[#Scrivener--2018|Scrivener et al. 2018]] ). Despite significant improvements in energy efficiency over the last couple of decades (e.g., a systematic move from wet to dry kilns with calciner preheaters feeding off the kilns), the direct emissions of cement production (the sum of energy and process emissions) are estimated to be 2.1–2.5 GtCO 2 -eq in 2019 or 14–17% of total global direct industrial GHG emissions ( [[#Lehne--2018|Lehne and Preston 2018]] ; [[#Bataille--2020a|Bataille 2020a]] ; [[#Sanjuán--2020|Sanjuán et al. 2020]] ; [[#Crippa--2021|Crippa et al. 2021]] ; [[#Hertwich--2021|Hertwich 2021]] ; [[#Lamb--2021|Lamb et al. 2021]] ) (Figure 11.4). Typically, about 40% of these direct emissions originate from process heating (e.g., for calcium carbonate (limestone) decomposition into calcium oxide at 850°C or higher, directly followed by combination with cementitious materials at about 1450°C to make clinker), while 60% are process CO 2 emissions from the calcium carbonate decomposition ( [[#Kajaste--2016|Kajaste and Hurme 2016]] ; [[#IEA%20and%20WBCSD--2018|IEA and WBCSD 2018]] ; [[#Andrew--2019|Andrew 2019]] ). Some of the CO 2 is reabsorbed into concrete products and can be seen as avoided during the decades-long life of the products; estimates of this flux vary between 15 and 30% of the direct emissions ( [[#Stripple--2018|Stripple et al. 2018]] ; [[#Andersson--2019|Andersson et al. 2019]] ; [[#Schneider--2019|Schneider 2019]] ; [[#Cao--2020|Cao et al. 2020]] ; [[#GCCA--2021a|GCCA 2021a]] ). Some companies are mixing CO 2 into hardening concrete, both to dispose of the CO 2 and more importantly reduce the need for binder ( [[#Lim--2019|Lim et al. 2019]] ).

One of the simplest and most effective ways to reduce cement and concrete emissions is to make stronger concrete through better mixing and aggregate sizing and dispersal; poorly and well-made concrete can vary in strength by a factor of four for a given volume ( [[#Fechner--2012|Fechner and Kray 2012]] ; [[#Habert--2020|Habert et al. 2020]] ). This argues for a refocus of the market away from ‘one size fits all’, often bagged cements to professionally mixed clinker, cementitious material and filler mixtures appropriate to the needs of the end use.

Architects, engineers and contractors also tend to overbuild with cement because it is cheap as well as corrosion- and water-resistant. Buildings and infrastructure can be purposefully designed to minimise cement use to its essential uses (e.g., compression strength and corrosion-resistance), and replace its use with other materials (e.g., wood, stone and other fibres) for non-essential uses. This could reduce cement use by 20–30% ( [[#Imbabi--2012|Imbabi et al. 2012]] ; Brinkerhoff and GLDNV 2015; [[#D’Alessandro--2016|D’Alessandro et al. 2016]] ; [[#Lehne--2018|Lehne and Preston 2018]] ; [[#IEA--2019b|IEA 2019b]] ; [[#Shanks--2019|Shanks et al. 2019]] ; [[#Habert--2020|Habert et al. 2020]] ).

Because so much of the emissions from concrete come from the limestone calcination to make clinker, anything that reduces use of clinker for a given amount of concrete reduces its GHG intensity. While 95% Portland cement is common in some markets, it is typically not necessary for all end-use applications, and many markets will add blast furnace slag, coal fly ash, or natural pozzolanic materials to replace cement as supplementary cementitious materials; 71% was the global average clinker content of cement in 2019 ( [[#IEA--2020a|IEA 2020a]] ). All these materials are limited in volume, but a combination of roughly two to three parts ground limestone and one part specially selected, calcined clays can also be used to replace clinker ( [[#Fechner--2012|Fechner and Kray 2012]] ; [[#Lehne--2018|Lehne and Preston 2018]] ; [[#Habert--2020|Habert et al. 2020]] ). Local building codes determine what mixes of cementitious materials are allowed for given uses and would need to be modified to allow these alternative mixtures where appropriate.

Ordinary Portland cement process CO 2 emissions cannot be avoided or reduced through the use of non-fossil energy sources. For this reason, CCS technology, which could capture just the process emissions (e.g., the EU LEILAC project, which concentrates the process emissions from the limestone calciner, see following paragraph) or both the energy and process-related CO 2 emissions, is often mentioned as a potentially important element of an ambitious mitigation strategy in the cement sector. Different types of CCS processes can be deployed, including post-combustion technologies such as amine scrubbing and membrane-assisted CO 2 -liquefation, oxycombustion in a low-to-zero nitrogen environment (full or partial) to produce a concentrated CO 2 stream for capture and disposal, or calcium-looping ( [[#Dean--2011|Dean et al. 2011]] ). The IEA puts cement CCS technologies at the technology readiness level (TRL) 6–8 ( [[#IEA--2020h|IEA 2020h]] ). These approaches have different strengths and weaknesses concerning emission abatement potential, primary energy consumption, costs and retrofittability ( [[#Hills--2016|Hills et al. 2016]] ; [[#Gardarsdottir--2019|Gardarsdottir et al. 2019]] ; [[#Voldsund--2019|Voldsund et al. 2019]] ). Use of biomass energy combined with CCS has the possibility of generating partial negative emissions, with the caveats introduced in Section ( [[#Hepburn--2019|Hepburn et al. 2019]] ).

The energy-related emissions of cement production can also be reduced by using bioenergy solids, liquids or gases (TRL 9) ( [[#IEA%20and%20WBCSD--2018|IEA and WBCSD 2018]] ), hydrogen or electricity (TRL 4 according to [[#IEA--2020h|IEA (2020h)]] ) for generating the high-temperature heat at the calciner – hydrogen and bioenergy co-burning could be complementary due to their respective fast-vs-slow combustion characteristics. In an approach pursued by the LEILAC research project, the calcination process step is carried out in a steel vessel that is heated indirectly using natural gas ( [[#Hills--2017|Hills et al. 2017]] ). The LEILAC approach makes it possible to capture the process-related emissions in a comparatively pure CO 2 stream, which reduces the energy required for CO 2 capture and purification. This technology (LEILAC in combination with CCS) could reduce total furnace emissions by up to 85% compared with an unabated, fossil fuelled cement plant, depending on the type of energy sources used for heating ( [[#Hills--2017|Hills et al. 2017]] ). In principle, the LEILAC approach allows the eventual potential electrification of the calciner by electrically heating the steel enclosure instead of using fossil burners.

In the long run, if some combination of material efficiency, better mixing and aggregate sizing, cementitious material substitution and 90%+ capture CCS with supplemental bioenergy are not feasible in some regions or at all to achieve near-zero emissions, alternatives to limestone-based ordinary Portland cement may be needed. There are several highly regional alternative chemistries in use that provide partial reductions ( [[#Fechner--2012|Fechner and Kray 2012]] ; [[#Lehne--2018|Lehne and Preston 2018]] ; [[#Habert--2020|Habert et al. 2020]] ), for example, carbonatable calcium silicate clinkers, and there have been pilot projects with magnesium-oxide-based cements, which could be negative emissions. Lower carbon cement chemistries are not nearly as widely available as limestone deposits ( [[#Material%20Economics--2019|Material Economics 2019]] ), and would require new materials testing protocols, codes, pilots and demonstrations.

Any substantial changes in cement and concrete material efficiency or production decarbonisation, however, will require comprehensive education and continuing re-education for cement producers, architects, engineers, contractors and small, non-professional users of cements. It will also require changes to building codes, standards, certification, labeling, procurement, incentives, and a range of polices to help create the market will be needed, as well as those for information disclosure, and certification for quality. Even an end-of-pipe solution like CCS will require infrastructure for transport and disposal. Abatement costs for these strategies vary considerably from case to case and for each a plausible cost range is difficult to establish, but they are summarised in Table 11.3 from the following literature and other sources ( [[#Wilson--2003|Wilson et al. 2003]] ; [[#Fechner--2012|Fechner and Kray 2012]] ; [[#Leeson--2017|Leeson et al. 2017]] ; [[#Moore--2017|Moore 2017]] ; [[#Lehne--2018|Lehne and Preston 2018]] ; [[#IEA--2019f|IEA 2019f]] ; [[#Habert--2020|Habert et al. 2020]] ).

<div id="11.4.1.3" class="h3-container"></div>

<span id="chemicals"></span>
==== 11.4.1.3 Chemicals ====

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The chemical industry produces a broad range of products that are used in a wide variety of applications. The products range from plastics and rubbers to fertilisers, solvents, and specialty chemicals such as food additives and pharmaceuticals. The industry is the largest industrial energy user and its direct emissions were about 1.1–1.7 GtCO 2 -eq or about 10% of total global direct industrial emissions in 2019 (Olivier and Peters 2018; [[#IEA--2019f|IEA 2019f]] ; [[#Crippa--2021|Crippa et al. 2021]] ; [[#Lamb--2021|Lamb et al. 2021]] ; [[#Minx--2021|Minx et al. 2021]] ) (Figure 11.4 and [[#_idTextAnchor023|Table 11.1]] ). With regard to energy requirements and CO 2 emissions, ammonia, methanol, olefins, and chlorine production are of great importance (Boulamanti and Moya Rivera 2017). Ammonia is primarily used for nitrogen fertilisers, methanol for adhesives, resins, and fuels, whereas olefins and chlorine are mainly used for the production of polymers, which are the main components of plastics.

Technologies and process changes that enable the decarbonisation of chemicals production are specific to individual processes. Although energy efficiency in the sector has steadily improved over the past decades (Boulamanti and Moya Rivera 2017; [[#IEA--2018a|IEA 2018a]] ) (Figure 11.8), a significant share of the emissions is caused by the need for heat and steam in the production of primary chemicals ( [[#Bazzanella--2017|Bazzanella and Ausfelder 2017]] ) (Box 11.2). This energy is currently supplied almost exclusively through fossil fuels which could be substituted with bioenergy, hydrogen, or low or zero carbon electricity, for example, using electric boilers or high-temperature heat pumps ( [[#Bazzanella--2017|Bazzanella and Ausfelder 2017]] ; [[#Thunman--2019|Thunman et al. 2019]] ; [[#Saygin--2021|Saygin and Gielen 2021]] ). The chemical industry has among the largest potentials for industrial energy demand to be electrified with existing technologies, indicating the possibility for a rapid reduction of energy-related emissions ( [[#Madeddu--2020|Madeddu et al. 2020]] ).

The production of ammonia causes most CO 2 emissions in the chemical industry, about 30% according to the [[#IEA--2018a|IEA (2018a)]] and nearly one third according to [[#Crippa--2021|Crippa et al. (2021)]] , [[#Lamb--2021|Lamb et al. (2021)]] and [[#Minx--2021|Minx et al. (2021)]] . Ammonia is produced in a catalytic reaction between nitrogen and hydrogen – the latter most often produced through natural gas reforming ( [[#Stork--2018|Stork et al. 2018]] ; [[#Material%20Economics--2019|Material Economics 2019]] ) and in some regions through coal gasification, which has several times higher associated CO 2 emissions. Future low-carbon options include hydrogen from electrolysis using low- or zero-carbon energy sources ( [[#Philibert--2017a|Philibert 2017a]] ), natural gas reforming with CCS, or methane pyrolysis, a process in which methane is transformed into hydrogen and solid carbon ( [[#Bazzanella--2017|Bazzanella and Ausfelder 2017]] ; [[#Material%20Economics--2019|Material Economics 2019]] ; ( [[#11.3.5|Section 11.3.5]] and Box 11.1). Electrifying ammonia production would lead to a decrease in total primary energy demand compared to conventional production, but a significant efficiency improvement potential remains in novel synthesis processes ( [[#Wang--2018|Wang et al. 2018]] ; [[#Faria--2021|Faria 2021]] ). Combining renewable energy sources and flexibility measures in the production process could allow for low-carbon ammonia production on all continents ( [[#Fasihi--2021|Fasihi et al. 2021]] ). Steam cracking of naphtha and natural gas liquids for the production of olefins (i.e., ethylene, propylene and butylene), and other high-value chemicals is the second most CO 2 -emitting process in the chemical industry, accounting for another almost 20% of the emissions from the subsector ( [[#IEA--2018a|IEA 2018a]] ). Future lower-carbon options include electrifying the heat supply in the steam cracker as described above, although this will not remove the associated process emissions from the cracking reaction itself or from the combustion of the by-products. Further in the future, electrocatalysis of carbon monoxide, methanol, ethanol, ethylene and formic acid could allow direct electric recombination of waste chemical products into new intermediate products ( [[#De%20Luna--2019|De Luna et al. 2019]] ).

A ranking of key emerging technologies with likely deployment dates from the present to 2025 relevant for the chemical industry identified different carbon capture processes together with electrolytic hydrogen production as being of very high importance to reach net zero emissions ( [[#IEA--2020a|IEA 2020a]] ). Methane pyrolysis, electrified steam cracking, and the biomass-based routes for ethanol-to-ethylene and lignin-to-BTX were ranked as being of medium importance. While macro-level analyses show that large-scale use of carbon circulation through CCU is possible in the chemical industry as primary strategy, it would be very energy intensive and the climate impact depends significantly on the source of and process for capturing the CO 2 ( [[#Artz--2018|Artz et al. 2018]] ; [[#Kätelhön--2019|Kätelhön et al. 2019]] ; [[#Müller--2020|Müller et al. 2020]] ). Significant synergies can be found when combining circular CCU approaches with virgin carbon feedstocks from biomass ( [[#Bachmann--2021|Bachmann et al. 2021]] ; [[#Meys--2021|Meys et al. 2021]] ).

In a net zero world carbon will still be needed for many chemical products, but the sector must also address the lifecycle emissions of its products which arise in the use phase, for example, CO 2 released from urea fertilisers, or at the end of life, for example, the incineration of waste plastics which was estimated to emit 100 Mt globally in 2015 ( [[#Zheng--2019|Zheng and Suh 2019]] ). Reducing lifecycle emissions can partly be achieved by closing the material cycles starting with material and product design planning for reuse, remanufacturing, and recycling of products – ending up with chemical recycling which yields recycled feedstock that substitutes virgin feedstocks for various chemical processes (Rahimi and García 2017; Smet and Linder 2019).However, the chemical recycling processes which are most well-studied are pyrolytic processes which are energy intensive and have significant losses of carbon to off-gases and solid residues ( [[#Dogu--2021|Dogu et al. 2021]] ; [[#Davidson--2021|Davidson et al. 2021]] ). They are thus associated with significant CO 2 emissions, which can even be larger in systems with chemical recycling than energy recovery ( [[#Meys--2020|Meys et al. 2020]] ). Further, the products from many pyrolytic chemical recycling processes are primarily fuels, which then in their subsequent use will emit all contained carbon as CO 2 ( [[#Vollmer--2020|Vollmer et al. 2020]] ). Achieving carbon neutrality would thus require this CO 2 either to be recirculated through energy-consuming synthesis routes or to be captured and stored ( [[#Geyer--2017|Geyer et al. 2017]] ; [[#Lopez--2018|Lopez et al. 2018]] ; [[#Material%20Economics--2019|Material Economics 2019]] ; [[#Thunman--2019|Thunman et al. 2019]] ). As all chemical products are unlikely to fit into chemical recycling systems, CCS can be used to capture and store a large share of their end-of-life emissions when combined with waste combustion plants or heat-demanding facilities like cement kilns ( [[#Leeson--2017|Leeson et al. 2017]] ; [[#Tang--2018|Tang and You 2018]] ).

Reducing emissions involves demand-side measures, for example, efficient end use, materials efficiency and slowing demand growth, as well as recycling where possible to reduce the need for primary production. The following strategies for primary production of organic chemicals which will continue to need a carbon source are key in avoiding the GHG emissions of chemical products throughout their lifecycles:

'''Recycled feedstocks''' : ''Chemical recycling'' of plastics unsuitable for mechanical recycling was already mentioned. Through ''pyrolysis'' of old plastics, both gas and a naphtha-like pyrolysis oil can be generated, a share of which could replace fossil naphtha as a feedstock in the steam cracker ( [[#Honus--2018a|Honus et al. 2018a]] ,b). Alternatively, waste plastics could be ''gasified'' and combined with low-carbon hydrogen to a syngas, for example, the production and methanol and derivatives ( [[#Lopez--2018|Lopez et al. 2018]] ; [[#Stork--2018|Stork et al. 2018]] ). Other chemical recycling options include polymer selective chemolysis, catalytic cracking, and hydrocracking ( [[#Ragaert--2017|Ragaert et al. 2017]] ). Carbon losses and process emissions must be minimised and it may thus be necessary to combine chemical recycling with CCS to reach near-zero emissions ( [[#Thunman--2019|Thunman et al. 2019]] ; Smet and Linder 2019; [[#Meys--2021|Meys et al. 2021]] ).

'''Biomass feedstocks:''' Substituting fossil carbon at the inception of a product lifecycle for carbon from renewable sources processed in designated biotechnological processes ( [[#Lee--2019|Lee et al. 2019]] ; [[#Hatti-Kaul--2020|Hatti-Kaul et al. 2020]] ) using specific biomass resources ( [[#Isikgor--2015|Isikgor and Becer 2015]] ) or residual streams already available ( [[#Abdelaziz--2016|Abdelaziz et al. 2016]] ). Routes with thermochemical and catalytic processes, such as pyrolysis and subsequent catalytic upgrading, are also available ( [[#Jing--2019|Jing et al. 2019]] ).

'''Synthetic feedstocks:''' Carbon captured with direct air capture or from point sources (bioenergy, chemical recycling, or during a transition period from industrial-processes-emitting fossil CO 2 ) can be combined with low-GHG hydrogen into a syngas for further valorisation ( [[#Kätelhön--2019|Kätelhön et al. 2019]] ). Thus, low-carbon methanol can be produced and used in methanol-to-olefins/aromatics (MTO/MTA) processes, substituting the steam cracker ( [[#Gogate--2019|Gogate 2019]] ) or Fischer-Tropsch processes could produce synthetic hydrocarbons.

Reflecting the diversity of the sector, the listed options can only be illustrative. The above-listed strategies all rely on low-carbon energy to reach near-zero emissions. In considering mitigation strategies for the sector it will be key to focus on those for which there is a clear path towards (close to) zero emissions, with high (carbon) yields over the full product value chain and minimal fossil resource use for both energy and feedstocks ( [[#Saygin--2021|Saygin and Gielen 2021]] ), with CCU and CCS employed for all remnant carbon flows. The necessity of combining mitigation approaches in the chemicals industry with low-carbon energy was recently highlighted in an analysis ( [[#_idTextAnchor025|Figure 11.10]] ) which showed how the combined use of different recycling options, carbon capture, and biomass feedstocks was most effective at reducing global lifecycle emissions from plastics ( [[#Meys--2021|Meys et al. 2021]] ). While most of the chemical processes for doing all the above are well known and have been used commercially at least partly, they have not been used at large scale and in an integrated way. In the past, external conditions (e.g., availability and price of fossil feedstocks) have not set the necessary incentives to implement alternative routes and to avoid emitting combustion- and process-related CO 2 emissions to the atmosphere. Most of these processes will very likely be more costly than using fossil fuels and full-scale commercialisation would require significant policy support and the implementation of dedicated lead markets ( [[#Wesseling--2017|Wesseling et al. 2017]] ; [[#Bataille--2018a|Bataille et al. 2018a]] ; [[#Material%20Economics--2019|Material Economics 2019]] ; [[#Wyns--2019|Wyns et al. 2019]] ). As in other subsectors, abatement costs for the various strategies vary considerably across regions and products, making it difficult to establish a plausible cost range for each ( [[#Bazzanella--2017|Bazzanella and Ausfelder 2017]] ; [[#Philibert--2017a|Philibert 2017a]] ; [[#Philibert--2017b|Philibert 2017b]] ; [[#Axelson--2018|Axelson et al. 2018]] ; [[#IEA--2018a|IEA 2018a]] ; [[#De%20Luna--2019|De Luna et al. 2019]] ; [[#Saygin--2021|Saygin and Gielen 2021]] ).

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[[File:9827bc5727729249f43222bb4197cf55 IPCC_AR6_WGIII_Figure_11_10.png]]

'''Figure 11.10 Feedstock supply and waste treatment in a scenario with a combination of mitigation measures in a pathway for low-c''' '''arbon plastics.''' Source: From Meys et al., “Achieving net-zero greenhouse gas emission plastics by a circular carbon economy”. Science , 374(6563), 71–76, DOI: 10.1126/science.abg9853. Reprinted with permission from AAAS.

<div id="Box 11." class="h2-container"></div>

<span id="box-11.-2-plastics-and-climate-change"></span>
=== Box 11.2 | Plastics and Climate Change ===

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The global production of plastics has increased rapidly over the past 70 years, with a compound annual growth rate (CAGR) of 8.4%, about 2.5 times the growth rate for global GDP (Geyer et al. 2017) and higher than other materials since 1970 ( [[#IEA--2019b|IEA 2019b]] ) . Global production of plastics is now more than 400 million tonnes, including synthetic fibres ( [[#IEA--2019b|IEA 2019b]] ) The per capita use of plastics is still up to 20 times higher in developed countries than in developing countries with low signs of saturation and the potential for an increased use is thus still very large ( [[#IEA--2018a|IEA 2018a]] ) . Plastics is the largest output category from the petrochemical industry, which as a whole currently uses about 14% of petroleum and 8% of natural gas ( [[#IEA--2018a|IEA 2018a]] ) . Forecasts for plastic production assuming continued growth at recent rates of about 3.5% point towards a doubled production by 2035, following record-breaking investments in new and increased production capacity based on petroleum and gas in recent years ( [[#CIEL--2017|CIEL 2017]] ; [[#Bauer--2021|Bauer and Fontenit 2021]] ) . IEA forecasts show that even in a world where transport demand for oil falls considerably by 2050 from the current about 100 mbpd, feedstock demand for chemicals will rise from about 12 mbpd to 15–18 mbpd ( [[#IEA--2019b|IEA 2019b]] ) . Projections for increasing plastic production as well as petroleum use, together with the lack of investments in breakthrough low-emission technologies, do not align with necessary emission reductions.

About half of the petroleum that goes into the chemical industry is used for producing plastics, and a significant share of this is combusted or lost in the energy-intensive production processes, primarily the steam cracker. GHG emissions from plastic production depend on the feedstock used (ethane-based production is associated with lower emissions than naphtha-based), the type of plastic produced (production of simple polyolefins is associated with lower emissions than more complex plastics such as polystyrene), and the contextual energy system (e.g., the GHG intensity of the electricity used) but weighted averages have been estimated to be 1.8 tCO 2 -eq t –1 for North American production ( [[#Daniel%20Posen--2017|Daniel Posen et al. 2017]] ) and 2.3 tCO 2 -eq t –1 for European production ( [[#Material%20Economics--2019|Material Economics 2019]] ). In regions more dependent on coal electricity production the numbers are likely to be higher, and several times higher for chemical production using coal as a feedstock – coal-based MTO has seven times higher emissions than olefins from steam cracking ( [[#Xiang--2014|Xiang et al. 2014]] ). Coal-based plastic and chemicals production has over the past decade been developed and deployed primarily in China ( [[#Yang--2019|Yang et al. 2019]] ). The production of plastics was thus conservatively estimated to emit 1085 MtCO 2 -eq yr –1 in 2015 ( [[#Zheng--2019|Zheng and Suh 2019]] ). Downstream compounding and conversion of plastics was estimated to emit another 535 MtCO 2 -eq yr –1 , while end-of-life treatment added 161 MtCO 2 -eq yr –1 . While incineration of plastic waste was the cause of only 5% of global plastic lifecycle emissions, in regions with waste-to-energy infrastructures this share is significantly larger, for example, 13% of lifecycle emissions in Europe (Ive [[#Vanderreydt--2021|Vanderreydt et al. 2021]] ). The effective recycling rate of plastics remains low relating to a wide range of issues such as insufficient collection systems, sorting capacity, contaminants and quality deficiencies in recycled plastics, design of plastics integrated in complex products such as electronics and vehicles, heterogenous plastics used in packaging, and illegal international trade.

<div id="11.4.1.4" class="h3-container"></div>

<span id="other-industry-sectors"></span>
==== 11.4.1.4 Other Industry Sectors ====

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The other big sources of direct global industrial combustion and process CO 2 emissions are light manufacturing and industry (9.7% in 2016), non-ferrous metals like aluminium (3.1%), pulp and paper (1.1%), and food and tobacco (1.9%) ( [[#Bataille--2020a|Bataille 2020a]] ; [[#Crippa--2021|Crippa et al. 2021]] ; [[#Lamb--2021|Lamb et al. 2021]] ).

Light manufacturing and industry represent a very diverse sector in terms of energy service needs (e.g., motive power, ventilation, drying, heating, compressed air, etc.) and it comprises both small and large plants in different geographical contexts. Most of the direct fossil fuel use is for heating and drying, and it can be replaced with low-GHG electricity through direct resistance, high-temperature heat pumps and mechanical vapour recompression, induction, infrared, or other electrothermal processes ( [[#Lechtenböhmer--2016|Lechtenböhmer et al. 2016]] ; [[#Bamigbetan--2017|Bamigbetan et al. 2017]] ). [[#Madeddu--2020|Madeddu et al. (2020)]] argue up to 78% of Europe’s industrial energy requirements are electrifiable through existing commercial technologies and 99% with the addition of new technologies currently under development. Direct solar heating is possible for low temperature needs (&lt;100°C) and concentrating solar for higher temperatures. Commercially available heat pumps can deliver 100°C–150°C but at least up to 280°C is feasible ( [[#Zühlsdorf--2019|Zühlsdorf et al. 2019]] ). Plasma torches using electricity can be used where high temperatures (&gt;1000°C) are required, but hydrogen, biogenic or synthetic combustible hydrocarbons (methane, methanol, ethanol, LPG, etc.) can also be used ( [[#Bataille--2018a|Bataille et al. 2018a]] ).

There is also a large potential for energy savings through cascading in industrial clusters similar to the one at Kalundborg, Denmark. Waste heat can be passed at lower and lower temperatures from facility to facility or circulated as low-grade steam or hot water, and boosted as necessary using heat pumps and direct heating. Such geographic clusters would also enable lower-cost infrastructure for hydrogen production and storage as well as CO 2 gathering, transport and disposal ( [[#IEA--2019f|IEA 2019f]] ).

Demand for aluminium comes from a variety of end uses where a reasonable cost, light-weight metal is desirable. It has historically been used in aircraft, window frames, strollers, and beverage containers. As fuel economy has become more desirable and design improvements have allowed crush bodies made of aluminium instead of steel, aluminium has become progressively more attractive for cars. Primary aluminium demand is total demand (100 Mt yr –1 in 2020) net of manufacturing waste reuse (14% of virgin and recycled input) and end-of-life recycling (about 20% of what reaches market). Primary aluminium consumption rose from under 20 Mt yr –1 in 1995 to over 66 Mt primary ingot production in 2020 (International Aluminium Institute change to 2021c). The [[#International%20Aluminium%20Institute--2021a|International Aluminium Institute (2021a)]] expects total aluminium consumption to reach 150–290 Mt yr –1 by 2050 with primary aluminium contributing 69–170 Mt and secondary recycled 91–120 Mt (as in-use stock triples or quadruples). The OECD forecasts increases in demand by 2060 for primary aluminium to 139 Mt yr –1 and for secondary aluminium to 71 Mt yr –1 ( [[#OECD--2019a|OECD 2019a]] ). Primary (as opposed to recycled) aluminium is generally made in a two-stage process, often geographically separated. In the first stage aluminium oxide is extracted from bauxite ore (often with other trace elements) using the Bayer hydrometallurgical process, which requires up to 200°C heat when sodium hydroxide is used to leach the aluminium oxide, and up to 1000°C for kilning. This is followed by electrolytic separation of the oxygen from the elemental aluminium using the Hall-Héroult process, by far the most energy-intense part of making aluminium. This process has large potential emissions from the electricity used (12.5 MWh per tonne aluminium BAT, 14–15 MWh per tonne average). From bauxite mine to aluminium ingot, reported total global average emissions are between 12 and 17.6 tCO 2 -eq per tonne of aluminium, depending on estimates and assumptions made [[#footnote-005|22]] ( [[#Saevarsdottir--2020|Saevarsdottir et al. 2020]] ). About 10% of this, 1.5 tonnes of direct CO 2 per tonne of aluminium are currently emitted as the graphite electrodes are depleted and combine with oxygen, and if less than optimal conditions are maintained, perfluorocarbons can be emitted with widely varying GHG intensity, up to the equivalent of 2 tCO 2 -eq per tonne of aluminium. PFC emissions, however, have been greatly reduced globally and almost eliminated in well-run facilities. Aluminium, if it is not contaminated, is highly recyclable and requires 1/20 of the energy required to produce virgin aluminium; increasing aluminium recycling rates from the 20–25% global average is a key emissions reduction strategy (Haraldsson and Johansson 2018).

The use of low- and zero-GHG electricity (e.g., historically from hydropower) can reduce the indirect emissions associated with making aluminium. A public-private partnership with financial support from the province of Québec and the Canadian federal government has recently announced a fundamental modification to the Hall-Héroult process by which the graphite electrode process emissions can be eliminated by substitution of inert electrodes. This technology is slated to be available in 2024 and is potentially retrofittable to existing facilities ( [[#Saevarsdottir--2020|Saevarsdottir et al. 2020]] ).

Smelting and otherwise processing of other non-ferrous metals like nickel, zinc, copper, magnesium and titanium with less overall emissions have relatively similar emissions reduction strategies ( [[#Bataille--2018|Bataille and Stiebert 2018]] ): (i) Increase material efficiency; (ii) Increase recycling of existing stock; (iii) Pursue ore-extraction processes (e.g., hydro- and electro-metallurgy) that allow more use of low-carbon electricity as opposed to pyrometallurgy, which uses heat to melt and separate the ore after it has been crushed. These processes have been used occasionally in the past but have generally not been used due to the relatively inexpensive nature of fossil fuels.

The pulp and paper industry (PPI) is a small net-emitter of CO 2, assuming the feedstock is sustainably sourced (Chapter 7), but it has large emissions of biogenic CO 2 from feedstock (700–800 Mt yr –1 ) ( [[#Tanzer--2021|Tanzer et al. 2021]] ). It includes pulp mills, integrated pulp and paper mills, and paper mills using virgin pulpwood and other fibre sources, residues and co-products from wood products manufacturing, and recycled paper as feedstock. Pulp mills typically have access to bioenergy in the chemical pulping processes to cover most or all of heat and electricity needs, for example, through chemicals recovery boilers and steam turbines in the kraft process. Mechanical pulping mainly uses electricity for energy; decarbonisation thus depends on grid emission factors. With the exception of the lime kiln in kraft pulp mills, process temperature needs are typically less than or equal to 150°C to 200°C, mainly steam for heating and drying. This means that this sector can be relatively easily decarbonised through continued energy efficiency, fuel switching and electrification, including use of high-temperature heat pumps ( [[#Ericsson--2018|Ericsson and Nilsson 2018]] ). Electrification of pulp mills could, in the longer term, make bio-residues currently used internally for energy, available as a carbon source for chemicals ( [[#Meys--2021|Meys et al. 2021]] ). The PPI also has the capabilities, resources and knowledge, to implement these changes. Inertia is mainly caused by equipment turnover rates, relative fuel and electricity prices, and the profitability of investments.

A larger and more challenging issue is how the forestry industry can contribute to the decarbonisation of other sectors and how biogenic carbon will be used in a fossil-free society, for example, through developing the forest-based bioeconomy ( [[#Pülzl--2014|Pülzl et al. 2014]] ; [[#Bauer--2018|Bauer 2018]] ). In recent years the concept of biorefineries has gained increasing traction. Most examples involve innovations for taking by-products or diverting small streams to produce fuels, chemicals and bio-composites that can replace fossil-based products, but there is little common vision on what really constitutes a biorefinery ( [[#Bauer--2017|Bauer et al. 2017]] ). Some of these options have limited scalability and the cellulose fibre remains the core product even in the relatively large shift from paper production to textiles fibre production.

Pulp mills have been identified as promising candidates for post-combustion capture and CCS ( [[#Onarheim--2017|Onarheim et al. 2017]] ), which could allow some degree of net-negative emissions. For deep decarbonisation across all sectors, notably switching to biomass feedstock for fuels, organic chemicals and plastics, the availability of biogenic carbon (in biomass or as biogenic CO 2 ; Chapter 7) becomes an issue. A scenario where biogenic carbon is CCU as feedstock implies large demands for hydrogen, completely new value chains and more closed carbon loops, all areas which are as yet largely unexplored ( [[#Ericsson--2017|Ericsson 2017]] ; [[#Meys--2021|Meys et al. 2021]] ).

<div id="11.4.1.5" class="h3-container"></div>

<span id="overview-of-estimates-of-specific-mitigation-potential-and-abatement-costs-of-key-technologies-and-processes-for-main-industry-sectors"></span>
==== 11.4.1.5 Overview of Estimates of Specific Mitigation Potential and Abatement Costs of Key Technologies and Processes for Main Industry Sectors ====

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Climate-policy-related literature focusing on deep industrial emission reductions has expanded rapidly since AR5. An increasing body of research proposes deep decarbonisation pathways for energy-intensive industries (Figure 11.13). [[#Bataille--2018a|Bataille et al. (2018a)]] address the question of whether it is possible to reduce GHG emissions to very low, zero, or negative levels, and identifies preliminary technological and policy elements that may allow the transition, including the use of policy to drive technological innovation and uptake. [[#Material%20Economics--2019|Material Economics (2019)]] , the [[#IEA--2019b|IEA (2019b)]] , the [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] and Climate Action Tracker (CAT; 2020) take steps to identify pathways integrating energy efficiency, material efficiency, circular economy and innovative technologies options to cut GHG emissions across basic materials and value chains. The key conclusion is that net zero CO 2 emissions from the largest sources (steel, plastics, ammonia, and cement) could be achieved by 2050 by deploying already available multiple options packaged in different ways ( [[#Davis--2018|Davis et al. 2018]] ; Material Economics 2019; [[#UKCCC--2019b|UKCCC 2019b]] ). The studies assume that for those technologies that have a kind of breakthrough technology status further technological development and significant cost reduction can be expected.

Table 11.3, modified from [[#Bataille--2020a|Bataille (2020a)]] and built from [[#McMillan--2016|McMillan et al. (2016)]] ; [[#Bazzanella--2017|Bazzanella and Ausfelder (2017)]] ; [[#Philibert--2017a|Philibert (2017a)]] ; [[#Wesseling--2017|Wesseling et al. (2017)]] ; [[#Axelson--2018|Axelson et al. (2018)]] ; [[#Bataille--2018a|Bataille et al. (2018a)]] [[#Davis--2018|Davis et al. (2018)]] ; [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] ; IEA (2019f, 2020c); [[#Material%20Economics--2019|Material Economics (2019)]] ; and [[#UKCCC--2019b|UKCCC (2019b)]] , presents carbon intensities that could be achieved by implementing mitigation options in major basic material industries, mitigation potential, estimates for mitigation costs, TRL and potential year of market introduction (Figure 11.13).

Table 11.3 acknowledges that for many carbon-intensive products a large variety of novel processes, inputs and practices capable of providing very deep emission reductions are already available and emerging. However, their application is subject to different economic and structural limitations, therefore in the scenarios assuming deep decarbonisation by 2050–2060 different technological mixes can be observed ( [[#11.4.2|Section 11.4.2]] ).

While deep GHG emissions reduction potential is assessed for various regions, assessment of associated costs is limited to only a few regions; nevertheless those analyses may be illustrative at the global scale. [[#UKCCC--2019b|UKCCC (2019b)]] provides costs assessments for different industrial subsectors (Table 11.3) for the UK. They provide three ranges: core, more ambitious, and when energy and material efficiency are limited. The core options range from 2–85 GBP2019 tCO 2 -eq –1 (e.g., reduction in GHG emissions by about 50% by 2050 applying energy efficiency (EE), ''ME'' , CCS, biomass and electrification). The more ambitious options are estimated at 32–119 GBP2019 tCO 2 -eq –1 (e.g., 90% emissions reduction via widespread deployment of hydrogen, electrification or bioenergy for stationary industrial heat/combustion). Finally, costs range from 33–299 GBP tCO 2 -eq –1 when energy and material efficiency are limited.

In [[#Material%20Economics--2019|Material Economics (2019)]] , costs are provided for separate technologies and subsectors, and also by pathways, each including new industrial processes, circular economy and CCS components in different proportions, allowing for the transition to net zero industrial emission in the EU by 2050. That means that the study provides information about the three main mid- to long-term options which could enable a wide abatement of GHG emissions. Given different electricity-price scenarios, average abatement costs associated with the circular economy-dominated pathway are: 12–75 EUR2019 tCO 2 -eq –1 ; for the carbon capture-dominated pathway 79 EUR2019 tCO 2 -eq –1 ; and for the new processes-dominated scenario 91 EUR2019 tCO 2 -eq –1 . Consequently, net-zero-emission pathways are about 3–25% costlier compared to the baseline ( [[#Material%20Economics--2019|Material Economics 2019]] ). According to the [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] , cement decarbonisation would cost on average USD110–130 tCO 2 –1 depending on the cost scenario. [[#Rootzén--2016|Rootzén and Johnsson (2016)]] state that CO 2 avoidance costs for the cement industry vary from 25 to 110 EUR tCO 2 –1 , depending on the capture option considered and on the assumptions made with respect to the different cost items involved. According to the [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] , steel can be decarbonised on average at USD60 tCO 2 –1 , with highly varying costs depending on low-carbon electricity prices.

For customers of final products, information on the potential impact of supply-side decarbonisation on final prices may be more useful than that of CO 2 abatement costs. A different approach has been developed to assess the costs of mitigation by estimating the potential impacts of supply-side decarbonisation on final product prices. [[#Material%20Economics--2019|Material Economics (2019)]] shows that with deep decarbonisation, depending on the pathway, steel costs grow by 20–30%; plastics by 20–45%; ammonia by 15–60%; and cement (not concrete) by 70–115%. While these are large and problematic cost increases for material producers working with low margins in a competitive market, final end-use product price increases are far less, for example, a car becomes 0.5% more expensive, supported by both [[#Rootzén--2016|Rootzén and Johnsson (2016)]] and the [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] . For comparison, [[#Rootzén--2017|Rootzén and Johnsson (2017)]] found that decarbonising cement-making, while doubling the cost of cement, would add &lt;1% to the costs of a residential building; the [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] found concrete would be 10–30% more expensive, adding USD15,000 or 3% to the price of a house including land value. Finally, the [[#IEA--2020a|IEA (2020a)]] estimated the impact on end-use prices are rather small, even in a net zero scenario; they find price increases of 0.2% for a car and 0.6% for a house, based on higher costs for steel and cement respectively.

Thus, the price impact scales down going across the value chain and might be acceptable for a significant share of customers. However, it has to be reflected that the cumulative price increase could be more significant if several different zero-carbon materials (e.g., steel, plastics and aluminium) in the production process of a certain product have to be combined, indicating the importance of material efficiency being applied along with production decarbonisation.

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=== Box 11.5 | Circular Economy Policy ===

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The implementation of a circular economy relies on the operationalisation of the R-imperatives or strategies which extend from the original 3Rs: Reduce, Reuse and Recycle, with the addition of Refuse, Reduce, Resell/Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle, Recover (energy), Re-mine and more (Reike et al. 2018) . The R implementation strategies are diverse across countries (Ghisellini et al. 2016; Kalmykova et al. 2018) but, in practice, the lower forms of retention of materials, such as recycling and recover (energy), often dominate. The lack of policies for higher retention of material use such as Reduce, Reuse, Repair and Remanufacture is due to institutional failures, lack of coordination and lack of strong advocates (Gonzalez Hernandez et al. 2018a) .

Policies addressing market barriers to circular business development need to demonstrate that circular products meet quality performance standards, ensure that the full environmental costs are reflected in market prices and foster market opportunities for circular products exchange, notably through industrial symbiosis clusters and trading platforms (Kirchherr et al. 2018; [[#OECD--2019a|OECD 2019a]] ; Hartley et al. 2020; [[#Hertwich--2020|Hertwich 2020]] ) . Policy levels span from micro (such as consumer or company) to meso (eco-industrial parks) and macro (provinces, regions and cities) (Geng et al. 2019) . The creation of eco-industry parks (‘industrial clusters’) has been encouraged by governments to facilitate waste exchanges between facilities, where by-products from one industry are used as a feedstock to

Box 11.5

another ( [[#Ding--2012|Ding and Hua 2012]] ; [[#Jiao--2014|Jiao and Boons 2014]] ; [[#Shi--2014|Shi and Yu 2014]] ; Tian et al. 2014; Winans et al. 2017) . Systematic assessment of wastes and resources is carried out to assess possible exchange between different supply chains and identify synergies of waste streams that include metal scraps, waste plastics, water heat, bagasse, paper, wood scraps, ash, sludge and others ( [[#Ding--2012|Ding and Hua 2012]] ; Sh i and Yu 2014) .

The development of data collection and indicators is nascent and need to ramp up to quantify the impacts and provide evidence to improve circular economy and materials efficiency policies. Policymakers need to leverage the potential socio-economic opportunities of transitioning to circular economies ( [[#Llorente-González--2020|Llorente-González and Vence 2020]] ), which shows positive GDP growth and job creation by shifting to more labour-intensive recycling plants and repair services than resource-extraction activities (WRAP and Alliance Green 2015; Cambridge Econometrics et al. 2018). The International Labour Organization estimates that worldwide employment would grow by 0.1% by 2030 under a circular economy scenario ( [[#ILO--2018|ILO 2018]] ). However questions remain if the type of jobs created are concentrated in low-wage labour-intensive circular activities which may need targeted policy instruments to improve working conditions ( [[#Llorente-González--2020|Llorente-González and Vence 2020]] ).

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=== 11.4.2 Transformation Pathways ===

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To discuss the general role and temporal implementation of the different options for achieving a net zero GHG emissions industry, mitigation pathways will be analysed. This starts with showing the results of IAM-based scenarios followed by specific studies which provide much higher technological resolution and allow a much deeper look into the interplay of different mitigation strategies. The comparison of more technology-focused sector-based scenarios with top-down-oriented scenarios provides the opportunity for a reciprocal assessment across different modelling philosophies and helps to identify robust elements for the transformation of the sector. Only some of the scenarios available in the literature allow for at least rough estimates of the necessary investments and give direction about relevant investment cycles and potential risks of stranded or depreciated assets. In some specific cases cost comparisons can be translated into expected difference costs not only for the overall sector, but also for relevant materials or even consumer products.

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==== 11.4.2.1 Central Results From (Top-down) Scenarios Analysis and Illustrative Mitigation Pathways Discussion ====

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[[IPCC:Wg3:Chapter:Chapter-3|Chapter 3]] conducted a comprehensive analysis of scenarios based on IAMs. The resulting database comprises more than 1000 model-based scenarios published in the literature. The scenarios span a broad range along temperature categories from rather baseline-like scenarios to the description of pathways that are compatible with the 1.5°C target. Comparative discussion of scenarios allows some insights with regard to the relevance of mitigation strategies for the industry sector (Figure 11.11).

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[[File:e5ca46bf1d07f0e632c0dbae3e9496e1 IPCC_AR6_WGIII_Figure_11_11.png]]

'''Figure 11.11 Industrial final energy (top left), CO''' 2 '''emissions (top middle), energy intensity (bottom left), carbon intensity (top right), share of electricity (bottom middle), and share of gases (bottom right).''' Energy intensity is final energy per unit of GDP. Carbon intensity is CO 2 emissions per EJ of final energy. The first four indicators are indexed to 2019, where values less than 1 indicate a reduction. Industrial-sector CO 2 emissions include fuel-combustion emissions only. Boxes indicate the interquartile range, the median is shown with a horizontal black line, while vertical lines show the 5 to 95% interval. Source: data are from the AR6 database; only scenarios that pass the vetting criteria are included ( [[IPCC:Wg3:Chapter:Chapter-3#3.2|Section 3.2]] ).

The main results from the [[IPCC:Wg3:Chapter:Chapter-3|Chapter 3]] analysis from an industry perspective are:

• While all scenarios show a decline in energy and carbon intensity over time, final energy demand and associated industry-related CO 2 emissions increase in many scenarios. Only ambitious scenarios (category C1) show significant reduction in final energy demand in 2030, more or less constant demand in 2050, but increasing demand in 2100, driven by growing material use throughout the 21st century. While carbon intensity shrinks over time, energy related CO 2 -emissions decline after 2030 even in less ambitious scenarios, but particularly in those pursuing a temperature incr ease below 2°C. Reduction of CO 2 emissions in the sector are achieved through a combination of technologies which includes nearly all options that have been discussed in this chapter (Sections 11.3 and 11.4.1). However, there are big differences with regard to the intensity by which the various options are implemented in the scenarios. This is particularly true for CCS for industrial applications and material efficiency and material demand management (i.e., service demand, service product intensity). The latter options are still under-represented in many global IAMs.

'''•''' There are only a few scenarios which allow net-negative CO 2 emissions for the industry for the second half of the century, while most scenarios assessed (including the majority of 1.5°C scenarios) end up with still significant positive CO 2 emissions. In comparison to the whole system most scenarios expect a slower decrease of industry-rel ated emissions.

• There is a great – up to a factor of two – difference in assumptions about the GHG mitigation potential associated with different carbon cost levels between IAMs and sector-specific industry models. Consequently, IAMs pick up mitigation options slower or later (or not at all) than models which are more technologically detailed. Due to their top-down perspective IAMs to date have not been able to represent the high complexity of industries in terms of the broad variety of technologies and processes (particularly circularity aspects) and to fully reflect the dynamics of the sector. In addition, as energy and carbon price elasticities are still not completely understood, primarily cost-driven models have their limitations. However, there are several ongoing activities to bring more engineering knowledge and technological details into the IAM models (Kermel i et al. 2021).

In addition to the more aggregated discussion, the IAMs illustrative mitigation pathways (IMPs) allow a deeper look into the transformation pathways related to the scenarios. For the illustrative mitigation pathways (IMPs) approach, sets of scenarios have been selected which represent different levels of GHG mitigation ambitions, scenarios which rely on different key strategies or even exclude some mitigation options, represent delayed actions or SDG-oriented pathways. For more detailed information about the selection see [[IPCC:Wg3:Chapter:Chapter-3#3.3.2|Section 3.3.2]] . compares for a selected number of key variables the results of IMPs and puts them in the context of the whole sample of IAMs scenario results for three temperature categories.

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[[File:9140c42296818db363314a8b6d0614b3 IPCC_AR6_WGIII_Figure_11_12.png]]

'''Figure 11.12 | Comparison of industry-sector-related CO''' 2 '''emissions (including process emissions), final energy demand, share of electricity and hydrogen in the final energy mix, and industrial carbon capture and storage (CCS) for different mitigation scenarios representing illustrative mitigation pathways and the full sample of integrated assessment models (IAM) scenario results for three temperature categories (figure based on scenario database).''' Indicators in the Illustrative Mitigation Pathways (lines) and the 5–95% range of reference, 1.5°C and 2°C scenarios (shaded areas). The selected IMPs reflect the following characteristics: opportunities for reducing demand (IMP-LD; low demand), the role of deep renewable energy penetration and electrification (IMP-Ren; renewables), extensive use of carbon dioxide removal (CDR) in the industry and the energy sectors to achieve net-negative emissions (IMP-Neg), insights into how shifting development can lead to deep emission reductions and achieve sustainable development goals (IMP-SP; shifting pathways), and insights into how slower short-term emissions reductions can be compensated by very fast emission reductions later on (IMP-GS; gradual strengthening). Furthermore, two scenarios were selected to illustrate the consequences of current policies and pledges; these are CurPol (Current Policies) and ModAct (Moderate Action), and are referred to as Pathways Illustrative of Higher Emissions. Source: data are from the AR6 database; only scenarios that pass the vetting criteria are included ( [[IPCC:Wg3:Chapter:Chapter-3#3.2|Section 3.2]] ).

With growing mitigation ambition final energy demand is significantly lower in comparison of a current policy pathway (CurPol) and a scenario that explores the impact of further moderate actions (ModAct). Based on the underlying assumptions, scenarios IMP-SP and IMP-LD are characterised by the lowest final energy demand, triggered by high energy efficiency improvement rates as well as additional demand side measures, while a scenario with extensive use of CDR in the industry and the energy sectors to achieve net-negative emissions (IMP-Neg) leads to a significant increase in final energy demand. Scenario IMP-GS represents a pathway where mitigation action is gradually strengthened by 2030 compared to pre-COP 26 Nationally Determined Contributions (NDCs) shows the lowest final energy demand. All ambitious IMPs show substantially increasing contributions from electricity, with electricity’s end-use share more than doubling for some of them by 2050 and more than tripling by 2100. The share of hydrogen shows a flatter curve for many scenarios, reaching 5% (IMP-Ren) in 2050 and up to 20% in 2100 for some scenarios (Ren, LD). Those scenarios that have a strong focus on renewable energy electrification show high shares of hydrogen in the sector. In comparison to sector-specific and national studies which show typically a range between 5 and 15% by 2050, many IAM IMPs expect hydrogen to play a less important role. Results for industrial CCS show a broad variety of contributions, with the GS scenario (where hydrogen is not relevant as a mitigation option) representing the upper bound to 2050, with almost 2 GtCO 2 yr –1 captured and stored by 2050. Beyond 2050 the upper bound is associated with scenario IMP-Neg associated with extensive use of CDR in the industry and energy sectors to achieve net-negative emissions in the second half of the century – more than 6 GtCO 2 yr –1 is captured and stored in 2100 (this represents roughly 60% of 2018 direct CO 2 emissions of the sector).

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==== 11.4.2.2 In-depth Discussion and ‘Reality’ Check of Pathways From Specific Sector Scenarios ====

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Since AR5 a number of studies providing a high technological level of detail for the industry sector have been released which describe how the industry sector can significantly reduce its GHG emissions until the middle of the century. Many of these studies try to specifically reflect the particular industry sector characteristics and barriers that hinder industry to follow an optimal transformation pathway. They vary in respect to different characteristics. In respect to their geographical scope, some studies analyse the prospects for industry sector decarbonisation on a global level ( [[#IEA--2017|IEA 2017]] a; [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission 2018]] ; [[#Grubler--2018|Grubler et al. 2018]] ; [[#IEA--2020a|IEA 2020a]] , 2019b, 2020c; [[#Tchung-Ming--2018|Tchung-Ming et al. 2018]] ); regional level, for example, [[#European%20Commission--2018|European Commission (2018)]] and [[#Material%20Economics--2019|Material Economics (2019)]] ; or country level – studies for China, from where most industry-related emissions come (e.g., [[#Zhou--2019|Zhou et al. 2019]] ). [[#footnote-004|23]] In regard to sectoral scope, some studies include the entire industry sector, while others focus on selected GHG emission intensive sectors, such as steel, chemicals and/or concrete. Most of the scenarios focus solely on CO 2 emissions, that is non-CO 2 emissions of the industrial sector are neglected. [[#footnote-003|24]]

Industry sector mitigation studies also differ in regard to whether they develop coherent scenarios or whether they focus on discussing and analysing selected key mitigation strategies, without deriving full energy and emission scenarios. Coherent scenarios are developed in [[#IEA--2017|IEA (2017)]] ; [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] ; [[#Grubler--2018|Grubler et al. (2018)]] ; [[#Tchung-Ming--2018|Tchung-Ming et al. (2018)]] ; IEA (2019b, 2020a,c); [[#IEA--2021a|IEA (2021a)]] ; and [[#IRENA--2021|IRENA (2021)]] on the global level, and in [[#Climact--2018|Climact (2018)]] ; [[#European%20Commission--2018|European Commission (2018)]] ; and [[#Material%20Economics--2019|Material Economics (2019)]] on the European level. Recent literature analysing selected key mitigation strategies, for example [[#IEA--2019b|IEA (2019b)]] and [[#Material%20Economics--2019|Material Economics (2019)]] has focused either exclusively or to a large extent on analysing the potential of materials efficiency and circular economy measures to reduce the need for primary raw materials relative to a business-as-usual development. The IEA (2021a, 2020a) also provides deep insights in to single mitigation strategies for the industry sector, particularly the role of CCS. The following discussion mainly concentrates on scenarios from the IEA. It has to be acknowledged that they only represent a small segment of the huge scenario family (see the scenario database in Chapter 3), but this approach enables to show the chronological evolution of scenarios coming from the same institution, using the same modelling approach (which allows a technology-rich analytical backcasting approach), but reflect additional requests that emerge over time (Table 11.5). In the 2DS scenario from the ‘Energy Technology Perspectives (ETP)’ study ( [[#IEA--2017|IEA 2017]] ), which intends to describe in great technological detail how the global energy system could transform by 2060 so as to be in line with limiting global warming to below 2°C, total CO 2 emissions are 74% lower in 2060 than in 2014, while only 39% lower in the industry sector. The Beyond 2°C Scenario (B2DS) of the same study intends to show how far known clean energy technologies (including those that lead to negative emissions) could go if pushed to their practical limits, allowing the future temperature increase to be limited to ‘well below’ 2°C and lowering total CO 2 emissions by 100% by 2060 and by 75% relative to 2014 in the industry sector.

Technologies penetration assumed in the CTS scenario by 2060 allows for an industrial emission cut of 45% from 2017 levels and a 50% cut against projected 2060 emissions in the Reference Technology Scenario (RTS) from the same study ( [[#IEA--2019b|IEA 2019b]] ), similar to IEA’s 2DS scenario. Energy efficiency improvements and deployment of BATs contribute 46% to cumulative emission reduction in 2018–2060, while fuel switching (15%), material efficiency (19%) and deployment of innovative processes (20%) provide the rest. IEA (2020a,c) which continues the Energy Technology Perspectives series include the new Sustainable Development Scenario (SDS) to describe a trajectory for emissions consistent with reaching global ‘net zero’ CO 2 emissions by around 2070. [[#footnote-002|25]] In 2070 the net zero balance is reached through a compensation of the remaining CO 2 emissions (fossil fuel combustion and industrial processes still lead to around 3 GtCO 2 ) by a combination of BECCS and to a lesser degree direct air capture and storage. In [[#IEA--2020c|IEA (2020c)]] the Faster Innovation Case (FIC) shows a possibility to reach a net zero emissions level globally already in 2050, assuming that technology development and market penetration can be significantly accelerated. Innovation plays a major role in this scenario as almost half of all the additional emissions reductions in 2050 relative to the reference case would be from technologies that are in an early stage of development and have not yet reached the market today ( [[#IEA--2020c|IEA 2020c]] ). The most ambitious IEA scenario NZE2050 ( [[#IEA--2021a|IEA 2021a]] ) describes a pathway reaching net zero emissions at system level by 2050. With 0.52 GtCO 2 industry-related CO 2 emissions (including process emissions) it ends up 94% below 2018 levels in 2050. Remaining emissions in the industry sector have to be compensated by negative emissions (e.g., via DAC).

Two studies complement the discussion of the IEA scenarios and are related to the IEA database. [[#footnote-001|26]] The ETC Supply Side scenario builds on the ETP 2017 study, investigating additional emission reduction potentials in the emissions-intensive sectors such as heavy industry and heavy-duty transport so as to be able to reach net zero emissions by the middle of the century. The LED scenario ( [[#Grubler--2018|Grubler et al. 2018]] ) also builds on the ETP 2017 study, but focuses on the possible potential of very far-reaching efforts to reduce future material demand.

A comparison of the different mitigation scenarios shows that they depend on how individual mitigation strategies in the industry sector (Figure 11.13) are assessed. The use of CCS, for example, is in many scenarios assessed as very important, while other scenarios indicate that ambitious mitigation levels can be achieved without CCS in the industry sector. CCS plays a major role in the B2DS scenario (3.2 GtCO 2 in 2050), the ETC Supply Side scenario (5.4 GtCO 2 in 2050) and the IEA (2020a, 2021a) scenarios (e.g., 2.8 Gt CO 2 in NZE2050 in 2050, roughly one half of the captured CO 2 is related to cement production), while it is explicitly excluded in the LED scenario. In the latter scenario, on the other hand, considerable emission reductions are assumed to be achieved by far-reaching reductions in material demand relative to a baseline development. In other words, the analysed scenarios also suggest that to reach very strong emission reductions from the industry sector either CCS needs to be deployed to a great extent or considerable material demand reductions will need to be realised. Such demand reductions only play a minor role in the 2DS scenario and no role in the ETC Supply Side scenario. The SDS described in [[#IEA--2020a|IEA (2020a)]] provides a pathway where both CCS and material efficiency contribute significantly. In SDS material efficiency is a relevant factor in several parts of industry, explicitly steel, cement, and chemicals. Combining the different material efficiency options including a substantial part lifetime extension (particularly of buildings) leads to 29% less steel production by 2070, 26% less cement production, and 25% less chemicals production respectively in comparison to the reference line used in the study (Stated Policy Scenario: STEPS). Sector- or subsector-specific analysis supports the growing role of material efficiency. For the global chemical and petrochemical sector, [[#Saygin--2021|Saygin and Gielen (2021)]] point out that circular economy (including recycling) has to cover 16% of the necessary reduction that is needed for the implementation of a 1.5°C scenario.

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[[File:683b0cc83768e0081b7a9fffefcded58 IPCC_AR6_WGIII_Figure_11_13.PNG]]

'''Figure 11.13 | Potentials and costs for zero-carbon mitigation options for industry and basic materials:''' CIEL – carbon intensity of electricity for indirect emissions; EE – energy efficiency; ME – material efficiency; Circularity – material flows (clinker substituted by coal fly ash, blast furnace slag or other by-products and waste, steel scrap, plastic recycling, etc '''''.''''' '''''); FeedCI – feedstock carbon intensity (hydrogen, biomass, novel cement, natural clinker substitutes); FSW+El – fuel switch and processes electrification with low-carbon electricity.''''' Ranges for mitigation options are shown based on bottom-up studies for grouped technologies packages, not for single technologies. In circles, contribution to mitigation from technologies based on their readiness are shown for 2050 (2040) and 2070. Direct emissions include fuel combustion and process emissions. Indirect emissions include emissions attributed to consumed electricity and purchased heat. For basic chemicals only methanol, ammonia and high-value chemicals are considered. The total for industry doesn’t include emissions from waste. Base values for 2020 for direct and indirect emissions were calculated using 2019 GHG emission data ( [[#Crippa--2021|Crippa et al. 2021]] ) and data for materials production from [[#World%20Steel%20Association--2020a|World Steel Association (2020a)]] and [[#IEA--2021d|IEA (2021d)]] . Negative mitigation costs for some options like Circularity are not reflected. Data from sources: [[#Pauliuk--2013a|Pauliuk et al. (2013a)]] ; [[#Fawkes--2016|Fawkes et al. (2016)]] ; [[#WBCSD--2016|WBCSD (2016)]] ; [[#Bazzanella--2017|Bazzanella and Ausfelder (2017)]] ; IEA (2018a, 2019b,g,h, 2020a,c, 2021a); [[#Lehne--2018|Lehne and Preston (2018)]] ; [[#Scrivener--2018|Scrivener et al. (2018)]] ; [[#EUROFER--2019|EUROFER (2019)]] ; Friedmann et al. (2019); [[#Material%20Economics--2019|Material Economics (2019)]] ; [[#Sandalow--2019|Sandalow et al. (2019)]] ; [[#CAT--2020|CAT (2020)]] ; [[#CEMBUREAU--2020|CEMBUREAU (2020)]] ; [[#Gielen--2020|Gielen et al. (2020)]] ; [[#Habert--2020|Habert et al. (2020)]] ; [[#World%20Steel%20Association--2020b|World Steel Association (2020b)]] ; [[#Bataille--2020a|Bataille (2020a)]] ; [[#GCCA--2021a|GCCA (2021a)]] ; and [[#Saygin--2021|Saygin and Gielen (2021)]] .

In all scenarios, the relevance of biomass and electricity in industrial final energy demand increases, especially in the more ambitious scenarios NZE2050, SDS, ETC Supply Side and LED. While in all scenarios, electrification becomes more and more important, hydrogen or hydrogen-derived fuels, on the other hand, do not contribute to industrial final energy demand by the middle of the century in 2DS and B2DS, while LED (1% final energy share in 2050) and particularly ETC Supply Side (25% final energy share in 2050) consider hydrogen or hydrogen-derived fuels as a significant option. In the updated IEA scenarios hydrogen and hydrogen-based fuels already play a more important role. In the SDS share in industry, final energy is around 10% ( [[#IEA--2020a|IEA 2020a]] ) and in the Faster Innovation Case around 12% ( [[#IEA--2020c|IEA 2020c]] ) in 2050. In the latter case this is based on the assumption that by 2050 on average each year 22 hydrogen-based steel plants come into operation ( [[#IEA--2020c|IEA 2020c]] ). In SDS around 60% of the hydrogen is produced on-site via water electrolysis while the remaining 40% is generated in fossil fuel plants (methane reforming) coupled with CCS facilities. In the NZE2050 scenario biomass/biomethane (13%/3%), hydrogen (3%), natural gas with CCUS (4%), and coal with CCUS (4%) are responsible for 27% of the final energy demand of the sector. This is much more than in 2018, starting here from roughly 6% (only biomass). Direct use of electricity still plays a bigger role in the analysis, as share of electricity increases in NZE2050 from 22% in 2018 to 28% in 2030 and 46% in 2050 (with 15% a part of the electricity is used to produce hydrogen). This is reflecting the effect that since the publication of older IEA reports more direct electric applications for the sector become available. In NZE2050 approximately 25% of total heat used in the sector is electrified directly with heat pumps or indirectly with synthetic fuels already by 2030.

For B2DS it is assumed that most of the available abatement options in the industry sector are pushed to their feasible limits. That leads to cumulative direct CO 2 emissions reductions compared to 2DS which come from: energy efficiency improvements and BAT deployment (42%), innovative processes and CCS (37%), switching to lower carbon fuels and feedstocks (13%), and material efficiency strategies in manufacturing processes (8%). Energy efficiency improvements are particularly important in the first time period.

The IEA World Energy Outlook indicates energy efficiency improvement in the 2020 to 2030 period as a major basis to switch from STEPS (stated policies) to the SDS (net zero emissions by 2070) pathway ( [[#IEA--2020i|IEA 2020i]] , 2021c). For many energy-intensive industries annual efficiency gains have to be almost doubled (e.g., from 0.6% yr –1 to 1.0% yr –1 for cement production) to contribute sufficiently to the overall goal. If net zero CO 2 emissions should be achieved already by 2050 as pursued in the NZE2050 scenario ( [[#IEA--2020i|IEA 2020i]] , 2021c) further accelerating energy efficiency improvements are necessary (e.g., for cement, annual efficiency gains of 1.75%), leading to the effect that in 2030 many processes are implemented closely to their technological limits. In total, sector final energy demand can be held nearly constant at 2018 levels until 2050 and decoupled from product demand growth.

The comparative analysis leads to the point that the relevance of individual mitigation strategies in different scenarios depends not only on a scenario’s level of ambition. Instead, implicit or explicit assumptions about: (i) the costs associated with each strategy, (ii) future technological progress and availability of individual technologies, and (iii) the future public or political acceptance of individual strategies are likely to be main reasons for the observed differences between the analysed scenarios. For many energy-intensive products, technologies capable of deep emission cuts are already available. Their application is subject to different economic and resources constraints (incremental investment needs, product prices escalation, requirements for escalation of new low-carbon power generation). To fully exploit potential availability of carbon-free energy sources (e.g., electricity or hydrogen and related derivates) is a fundamental prerequisite and marks the strong interdependencies between the industry and the energy sector.

Assessment of the scenario literature allows to conclude that under specific conditions strong CO 2 -emission reductions in the industry sector by 2050–2070 and even net-zero-emission pathways are possible. However, there is no consensus on the most plausible or most desirable mix of key mitigation strategies to be pursued. In addition it has to be stressed that suitable pathways are very country-specific and depend on the economic structure, resource potentials, technological competences, and political preferences and processes of the country or region in question ( [[#Bataille--2020a|Bataille 2020a]] ).

There is a consensus among the scenarios that a significant shift is needed from a transition process in the past mainly based on marginal (incremental) changes (with a strong focus on energy efficiency efforts) to one based on transformational change. To limit the barriers that are associated with transformational change, besides overcoming the valley of death for technologies or processes with breakthrough character, it is required to carefully identify structural change processes which are connected with substantial changes of the existing system (including the whole process chain). This has to be done at an early stage and has to be linked with considerations about preparatory measures which are able to flank the changes and to foster the establishment of new structures ( [[#11.6|Section 11.6]] ). The right sequencing of the various mitigation options and building appropriate bridges between the different strategies are important. [[#Rissman--2020|Rissman et al. (2020)]] proposes three phases of technologies deployment for the industry sector: (i) energy/material efficiency improvement (mainly incremental) and electrification in combination with demonstration projects for new technologies potentially important in subsequent phases (2020–2035), (ii) structural shifts based on technologies which reach maturity in phase (i) such as CCS and alternative materials (2035–2050), (iii) widespread deployment for technologies that are nascent today like molten oxide electrolysis-based steel-making. There are no strong boundaries between the different phases and all phases have to be accompanied by effective policies like R&amp;D programmes and market pull incentives.

Taking the steel sector as an illustrative example, sector-specific scenarios examining the possibility to reach GHG reduction beyond 80% ( [[#CAT--2020|CAT 2020]] ; [[#Bataille--2021b|Bataille et al. 2021b]] ; [[#IEA--2021a|IEA 2021a]] ; [[#Vogl--2021b|Vogl et al. 2021b]] ) indicate that robust measures comprise direct reduction of iron (DRI) with hydrogen in combination with efforts to further close the loops and increase availability of scrap metal (reducing the demand for primary steel). As hydrogen-based DRI might not be a fully mature technology before 2030 (depending on further developments of the policy framework and technological progress), risk of path dependencies has to be taken into consideration when reinvestments in existing production capacities will be required in the coming years. For existing plants, implementation of energy efficiency measures (e.g., utilisation of waste heat, improvement of high-temperature pumps) could build a bridge for further mitigation measures but have only limited unexhausted potential. As many GHG mitigation measures are associated with high investment costs and missing operating experience, a step-by-step implementing process might be an appropriate strategy to avoid investment leakage (given the mostly long operation times, investment cycles have to be used so as not to miss opportunities) and to gain experience. In the case of steel, companies can start with the integration of a natural gas-based direct reduced iron furnace feeding the reduced iron to an existing blast furnace, blending and later replacing the natural gas by hydrogen in a second stage, and later transitioning to a full hydrogen DRI EAF or molten oxide electrolysis EAF, all without disturbing the local upstream and downstream supply chains.

It is worth mentioning the flexibility of implementing transformational changes not the least depends on the age profile and projected longevity of existing capital stock, especially the willingness to accept the intentional or market-based stranding of high GHG intensity investments. This is a relevant aspect in all producing countries, but particularly in those countries with a rather young industry structure (i.e., comparative low age of existing facilities on average). [[#Tong--2019|Tong et al. (2019)]] suggest that in China, using the survival rate as a proxy, less than 10% of existing cement or steel production facilities will reach their end of operation time by 2050. [[#Vogl--2021b|Vogl et al. (2021b)]] argue that the mean blast furnace campaign is considerably shorter than used in Tong et al.(2019), at only 17 years between furnace relining, which suggests there is more room for retrofitting with clean steel major process technologies than generally assumed. [[#Bataille--2021b|Bataille et al. (2021b)]] found if very low carbon intensity processes were mandatory starting in 2025, given the lifetimes of existing facilities, major steel process lifetimes of up to 27 years would still make a full retrofit cycle with low-carbon processes possible. [[#footnote-000|27]]

In general, early adoption of new technologies plays a major role. Considering the long operation time (lifetime) of industrial facilities (e.g., steel mills and cement kilns) early adoption of new technologies is needed to avoid lock-in. For the SDS 2020 scenario, the [[#IEA--2020h|IEA (2020h)]] calculated the potential cumulative reduction of CO 2 emissions from the steel, cement and chemicals sector to be around 57 GtCO 2 if production technology is changed at its first mandatory retrofit, typically 25 years, rather than at 40 years (typical retrofitted lifetime) (Figure 11.14). Net zero pathways require that the new facilities are based on zero- or near-zero emissions technologies from 2030 onwards ( [[#IEA--2021c|IEA 2021c]] ).

Another important finding is that material efficiency and demand management are still not well represented in the scenario literature. Besides [[#IEA--2020a|IEA (2020a)]] two of the few exceptions are [[#Material%20Economics--2019|Material Economics (2019)]] for the EU and [[#Zhou--2019|Zhou et al. (2019)]] for China. [[#Zhou--2019|Zhou et al. (2019)]] describe a consistent mitigation pathway (Reinventing Fire scenario) for China where in 2050 CO 2 emissions are at a level 42% below 2010 emissions. Around 13% of the reduction is related to less material demand, mainly based on extension of building and infrastructure lifetime, as well as reduction of material losses in the production process and application of higher quality materials particularly high-quality cement ( [[#Zhou--2019|Zhou et al. 2019]] ). For buildings and cars, [[#Pauliuk--2021|Pauliuk et al. (2021)]] analysed the potential role of material efficiency and demand management strategies on material demand to be covered by the industry sector.

For the four subsectors in industry with high emissions, [[#_idTextAnchor031|Table 11.5]] shows results from [[#Material%20Economics--2019|Material Economics (2019)]] for the EU. The combination of circularity, material and energy efficiency, fossil and waste fuels mix, electrification, hydrogen, CCS and biomass use varies from scenario to scenario with none of these options ignored, but trade-offs are required.

'''Table 11.5 | Contribution to emission reduction of different mitigation strategies for net zero emissions pathways (range represents three different pathways for the industry sector in Europe; each related scenario focuses on different key strategies).''' 27

{| class="wikitable"
|-
! rowspan="2"|
! Steel

! Plastics

! Ammonia

! Cement

|-
! colspan="4"| Contribution to emission reduction (%) (range represents the three different pathways of the study)

|-
| Circularity

| 5–27

| 15-28

| 13–22

| 10–44

|-
| Energy efficiency

| 5–23

| 2–9

| rowspan="5"| 25–84

| 1–5

|-
| Fossil fuels and waste fuels

| 9–41

| 0–27

| 0–51

|-
| Decarbonised electricity

| 36–59

| 16–22

| 29–71

|-
| Biomass for fuel or feedstock

| 5–9

| 18–22

| 0–9

|-
| End-of-life plastic

|
| 16–35

|
|-
| CCS

| 5–34

| 0–31

| 0–57

| 29–79

|-
|
| colspan="4"| '''Required electr''' '''ification level'''

|-
| Growth of electricity demand (times compared with 2015)

| 3–5

| 3–4

|
| 2–5

|-
|
| colspan="4"| '''Investments and production c''' '''osts escalation'''

|-
| Investment needs growth (% versus BAU)

| 25–65

| 122–199

| 6–26

| 22–49

|-
| Cost of production (% versus BAU)

| +2–20

| +20–43

| +15–111

| +70–115

|}

Source: [[#Material%20Economics--2019|Material Economics (2019)]] .

The analysis of net zero emission pathways requires significantly higher investments compared to business as usual (BAU): 25–65% for steel, 6–26% for ammonia, 22–49% for cement, and with 122–199% the highest number for plastics ( [[#Material%20Economics--2019|Material Economics 2019]] ).

While sector-specific cost analyses are rare in general, there are scenarios indicating that pathways to net zero CO 2 emissions in the emissions-intensive sectors can be realised with limited additional costs. According to the [[#Energy%20Transitions%20Commission--2018|Energy Transitions Commission (2018)]] , deep decarbonisation from four major industry subsectors (plastics, steel, aluminium and cement) is achievable on a global level with cumulative incremental capital investments (2015–2050) limited to about 0.1% of aggregate GDP over that period. [[#UKCCC--2019a|UKCCC (2019a)]] assesses that total incremental costs (compared to a theoretical scenario with no climate change policy action at all) for cutting industrial emissions by 90% by 2050 is 0.2% of expected 2050 UK GDP ( [[#UKCCC--2019a|UKCCC 2019a]] ). The additional investment is 0.2% of gross fixed capital formation ( [[#Material%20Economics--2019|Material Economics 2019]] ). The [[#IEA--2020a|IEA (2020a)]] indicates the required annual incremental global investment in heavy industry is approximately 40 billion 2019USD yr –1 moving from STEPS to the SDS scenario (2020–2040), rising to USD55 billion yr –1 (2040–2070), effectively 0.05–0.07% of global annual GDP today.

Finally, a new literature is emerging, based on the new sectoral electrification, hydrogen- and CCS- based technologies listed in previous sections, considering the possibility of rearranging standard supply and process chains using regional and international trade in intermediate materials like primary iron, clinker and chemical feedstocks, to reduce global emissions by moving production of these materials to regions with large and inexpensive renewable energy potential or CCS geology ( [[#Bataille--2020a|Bataille 2020a]] ; [[#Gielen--2020|Gielen et al. 2020]] ; [[#Bataille--2021a|Bataille et al. 2021a]] ; [[#Saygin--2021|Saygin and Gielen 2021]] ).

In a sequence of sectoral- and industry-wide figures above (Figure 11.13), it is shown – starting in the present on the left and moving through 2050 to 2070 on the right, how much separate mitigation strategies can contribute and how they are integrated in the literature to reach near-zero emissions. For cement, steel and primary chemicals GHG intensities are presented, and for all industry absolute GHG emissions are displayed. Effects of the following mitigation strategies are reflected: energy efficiency, material efficiency, circularity/recycling, feedstock carbon intensity, fuel switching, CCU and CCS. Contributions of technologies split by their readiness for 2050 and 2070 are provided along with ranges of mitigation costs for achieving near-zero emissions for each strategy, accompanied by ranges of associated basic materials cost escalations and driven by these final products’ prices increments.

'''Table 11.4 | Perspectives on industrial sector mitigation potential (comparison of different''' '''IEA scenarios).'''

{| class="wikitable"
|-
! rowspan="2"| Reduction of direct CO 2 emissions

! rowspan="2"| Scenario assumptions a

! colspan="2"| IEA (2017, 2020c,i, 2021a)

! [[#IEA--2019b|IEA (2019b)]]

! colspan="2"| IEA (2020a,c)

|-
! 2030

! 2050

! 2060

! 2050

! 2070

|-
| colspan="7"| '''Baseline direct emissions from industrial sector'''

|-
| Reference Technology Scenario (RTS)

| Industry sector improvements in energy consumption and CO 2 emissions are incremental, in line with currently implemented and announced policies and targets.

| 9.8 GtCO 2

| 10.4 GtCO 2

| 9.7 GtCO 2

|
|-
| colspan="7"| '''Emissions reduction potential'''

|-
| 2°C Scenario (2DS)

| Assumes the decoupling of production in industry from CO 2 -emissions growth across the sector that would be compatible with limiting the rise in global mean temperature to 2°C by 2100.

| –7% vs 2014 a

–20% vs RTS b

| –39% vs 2014 b

–50% vs RTS b

|
|-
| Beyond 2°C Scenario (B2DS)

| Pushes the available CO 2 abatement options in industry to their feasible limits in order to aim for the ‘well below 2°C’ target.

| –28% vs 2014

–38% vs RTS

| –75% vs 2014

–80% vs RTS

|
|-
| Clean Technology Scenario (CTS)

| Strong focus on clean technologies. Energy efficiency and deployment of BATs contribute 46% to cumulative emission reduction in 2018–2060; fuel switch –15%; material efficiency – 19%; deployment of innovative processes – 20%.

|
| 5 Gt CO 2 or –45% vs 2017 level and –50% from 2060 RTS level

|
|-
| Sustainable Development Scenario 2020

(SDS 2020)

| Leads to net zero emissions globally by 2070. Remaining emissions in some sectors (including industry) in 2070 will be compensated by negative emissions in other areas (e.g., through BECCS and DAC).

|
| ~ 4.0 GtCO 2

| ~ 0.6 GtCO 2

|-
| Net zero emissions (NZE, 2021)

| Net zero emissions across all sectors are reached already by 2050.

| –23% (i.e., 2.1 GtCO 2 ) vs 2018.

| –94% (i.e., 8.4 GtCO 2 ) vs 2018

|
|-
| Faster Innovation Case (FIC)

| Achieves net-zero emissions status already by 2050 based on accelerated development and market penetration of technologies which have currently not yet reached the market.

|
| 0.8 Gt CO 2

(mainly steel and chemical industry)

|
|}

a Based on bottom-up technology modelling of five energy-intensive industry subsectors (cement, iron and steel, chemicals and petrochemicals, aluminium, and pulp and paper).

b Industrial direct CO 2 emissions reached 8.3 GtCO 2 in 2014, 24% of global CO 2 emissions.

Source: IEA (2017, 2019b, 2020a, 2020c,i, 2021a).

<div id="11.4.3" class="h2-container"></div>

<span id="cross-sectoral-interactions-and-societal-pressure-on-industry"></span>
=== 11.4.3 Cross-sectoral Interactions and Societal Pressure on Industry ===

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Mitigation involves greater integration and coupling between sectors. This is widely recognised, for example, in the case of electrification of transport (Sections 6.6.2 and 10.3.1), but it has been less explored for industrial decarbonisation. Industry is a complex web of subsectors and intersectoral interaction and dependence, with associated mitigation opportunities and co-benefits and costs ( [[#OECD--2019b|OECD 2019b]] ; [[#Mendez-Alva--2021|Mendez-Alva et al. 2021]] ). Implementation of the mitigation options assessed in [[#11.3|Section 11.3]] will result in new sectoral couplings, value chains, and business models but also in the phasing out of old ones. Notably, electrification in industry, hydrogen and sourcing of non-fossil carbon involves profound changes to how industry interacts with electricity systems and how industrial subsectors interact. For example, the chemicals and forestry industries will become much more coupled if various forms of biogenic carbon become an important feedstock for plastics ( [[#_idTextAnchor025|Figure 11.10]] ). Clinker substitution with blast furnace slag in the cement industry is a well-established way of reducing CO 2 emissions ( [[#Fechner--2012|Fechner and Kray 2012]] ), but this slag will no longer be available if blast furnaces are phased out. Furthermore, additional material demand resulting from mitigation in other sectors, as well as adaptation and the importance of material efficiency improvements, are issues that have attracted increasing attention since AR5 ( [[#IEA--2019b|IEA 2019b]] ; [[#Bleischwitz--2020|Bleischwitz 2020]] ; [[#Hertwich--2020|Hertwich et al. 2020]] ). How future material will be affected under different climate scenarios is underexplored and typically not accounted for in modelling ( [[#Bataille--2021a|Bataille et al. 2021a]] ).

Using industrial waste heat for space heating, via district heating, is an established practice that still has a large potential with large quantities of low-grade heat being wasted ( [[#Fang--2015|Fang et al. 2015]] ). For Denmark it is estimated that 5.1% of district heating demand could be met with waste heat ( [[#Bühler--2017|Bühler et al. 2017]] ) and for four towns studied in Austria 3–35% of total heat demand could be met ( [[#Karner--2016|Karner et al. 2016]] ). A European study shows that temporal heat demand flexibility could allow for up to 100% utilisation of excess heat from industry ( [[#Karner--2018|Karner et al. 2018]] ). A study of a Swedish chemicals complex estimated that 30–50% of excess heat generated on-site could be recovered with payback periods below three years ( [[#Eriksson--2018|Eriksson et al. 2018]] ).

A European study found that most of the industrial symbiosis or clustering synergies today are in the chemicals sector with shared streams of energy, water, and carbon dioxide ( [[#Mendez-Alva--2021|Mendez-Alva et al. 2021]] ). For future mitigation, the [[#UKCCC--2019b|UKCCC (2019b)]] finds that industrial clustering may be essential for achieving the necessary efficiencies of scale and to build the infrastructure needed for industrial electrification; carbon capture, transport and disposal; hydrogen production and storage; heat cascading between industries and to other potential heat users (e.g., residential and commercial buildings).

With increasing shares of renewable electricity production there is a growing interest in industrial demand response, storage and hybrid solutions with on-site PV and combined heat and power (CHP) ( [[#Shoreh--2016|Shoreh et al. 2016]] ; [[#Scheubel--2017|Scheubel et al. 2017]] ; [[#Schriever--2018|Schriever and Halstrup 2018]] ). With future industrial electrification, and in particular with hydrogen used as reduction agent in iron-making or as feedstock in the chemicals industry, the level of interaction between industry and power systems becomes very high. Large amounts of coking coal, or oil and gas as petrochemical energy and feedstock, are then replaced by electricity. For example, [[#Meys--2021|Meys et al. (2021)]] estimates a staggering future electricity demand of 10,000 TWh in a scenario for a net zero emissions plastics production of 1100 Mt in 2050 (see Section [[#_idTextAnchor014|11.3.5]] for other estimates of electricity demand). Much of this electricity is used to produce hydrogen to allow for CCU and this provides a very large potential flexible demand if electrolysers are combined with hydrogen storage. [[#Vogl--2018|Vogl et al. (2018)]] describe how hydrogen DRI and EAF steel plants can be highly flexible in their electricity demand by storing hydrogen or hot-briquetted iron and increasing the share of scrap in EAF. The [[#IEA--2019f|IEA (2019f)]] Future of Hydrogen report suggests that hydrogen production and storage networks could be in locations with already existing hydrogen production and storage, for example, chemical industries, and that these could be ideal for system load balancing and demand response, and in the case of district heating systems – for heat cascading.

The climate awareness that investors, shareholders, and customers demand from companies has been increasing steadily. It is reflected in the growing number of environmental management, carbon footprint accounting, benchmarking and reporting schemes (e.g., the Carbon Disclosure Project, Task Force on Climate-Related Financial Disclosures, Environmental Product Declarations, and others, e.g., [[#Qian--2018|Qian et al. 2018]] ) requiring companies to disclose both direct and indirect GHG emissions, and creating explicit (for regulatory schemes) as well as implicit GHG liabilities. This requires harmonised and widely accepted methods for environmental and carbon footprint accounting ( [[#Bashmakov--2021b|Bashmakov et al. 2021b]] ). From an investor perspective there are both physical risks (e.g., potential damages from climate change to business) and transition risks (e.g., premature devaluation of assets driven by new policies and technologies deployment and changes in public and private consumer preferences ( [[#NGFS--2019a|NGFS 2019a]] )). Accompanied by reputational risks this leads to increased attention to Sustainable and Responsible Investment (SRI) principles and increased demands from investors, consumers and governments on climate and sustainability reporting and disclosure ( [[#NGFS--2019b|NGFS 2019b]] ). For example, Japan’s Keidanren promotes a scheme by different industries to reduce GHG through the global value chain, including material procurement, product-use stages, and disposal, regardless of geographical origin, with provided quantitative visualisation ( [[#Keidanren%20(Japan%20Business%20Federation)--2018|Keidanren (Japan Business Federation) 2018]] ). The EU adopted a non-financial disclosure directive in 2014 ( [[#Kinderman--2020|Kinderman 2020]] ) and a Taxonomy for Sustainable Finance in 2019 ( [[IPCC:Wg3:Chapter:Chapter-15#15.6.1|Section 15.6.1]] ).

<div id="11.4.4" class="h2-container"></div>

<span id="links-to-climate-change-and-adaptation"></span>
=== 11.4.4 Links to Climate Change and Adaptation ===

<div id="h2-18-siblings" class="h2-siblings"></div>

Sectors that are particularly vulnerable to climate change include agriculture, forestry, fisheries and aquaculture, and their downstream processing industries (Bezner et al. 2021). Many of the energy-intensive industries are located based on access to fresh water (e.g., pulp and paper) or sea transport (e.g., petrochemicals). Risks of major concern for industry include disrupted supply chains and energy supplies due to extreme weather events, as well as risks associated with droughts, floods with dirty water, sea level rise and storm surges (Dodman et al. 2021). Adaptation measures may in turn affect the demand for basic materials (e.g., steel and cement), for example, increased demand to build sea walls and protect infrastructure, but we have not found any estimates of the potential demand. Increased heat stress is unsafe for outdoor labourers and can reduce worker productivity, for example, in outdoor construction, resource extraction and waste handling ( [[#Ranasinghe--2021|Ranasinghe et al. 2021]] ).

<div id="11.5" class="h1-container"></div>

<span id="industrial-infrastructure-policy-and-sustainable-development-goal-contexts"></span>